Supreme Court Intensifies Scrutiny on Cash Transactions Over Rs 2 Lakh

The Supreme Court expressed concerns over the Finance Act 2017's inadequate implementation that limits cash transactions to Rs two lakh. The court mandates that any legal suit regarding cash transactions over this limit must alert the Income Tax authority to investigate compliance with Section 269ST, aimed at reducing black money.

The Supreme Court has sounded an alarm over the ineffective enforcement of the Finance Act 2017, which restricts cash dealings to Rs two lakh. The top court emphasized the necessity for stronger enforcement mechanisms for a law designed to curb black money in the Indian economy.

Irritated by cases of non-compliance, the bench, comprising Justices JB Pardiwala and R Mahadevan, has directed all courts to notify jurisdictional Income Tax authorities whenever a suit claims cash payments surpassing the legal limit. This directive comes amid a plea concerning a property transaction involving Rs 75 lakh in cash.

Conceived as a move towards a digital economy, the cash cap aims to restrain the shadow economy. Whenever jurisdictions encounter potential breaches in property transaction registrations, pertinent authorities are required to investigate, ensuring compliance and taking legal measures against those flouting the law.

(With inputs from agencies.)