A Special Investigation Team, which has been working on ways to curb black money, submitted its fifth report to the Supreme Court in which it recommended a ban on cash transactions of above Rs 3 lakh. The SIT, headed by retired Justice MB Shah, also asked the apex court to frame an Act under which such transactions will be declared illegal and punishable under law, reported PTI.

The team also suggested the court puts a cap on cash holding with individuals to not more than Rs 15 lakh. According to the panel, the cash transaction limit can only succeed if there is a limitation on cash holding. But if under any circumstances, a person or a company must keep more than Rs 15 lakh cash, permission can be obtained from the Commissioner of Income Tax of the area, it said.

In an official statement, the panel said, “Having considered the provisions which exist in this regard in various countries and also having considered various reports and observations of courts regarding cash transactions the SIT felt that there is a need to put an upper limit to cash transactions." If introduced, these measures will help ensure there is a paper trail for all high-value transactions and will consequently prevent tax evasion.