The union government on Tuesday proposed to cap cash transactions at Rs 2 lakh instead of the proposed Rs 3 lakh. The proposal was made in the finance bill that was introduced in the parliament.The bill proposes to levy a service charge on all cash transaction above Rs 2 lakh which was initially capped at Rs 3 lakh per month.
Finance minister Arun Jaitley, in this year's budget, had proposed to cap cash transaction per month at Rs 3 lakh. All banks started levying service fee on cash transaction beyond Rs 3 lakh per month starting March 1. However, with this move, if the bill is passed, the cap will further be reduced to Rs 2 lakh.
While the government has time and again deemed it a move to encourage cashless transaction and curb black money, vehement criticisms have also come its way for taxing common citizens.