New Delhi: The government today proposed to lower the cash transaction limit to Rs 2 lakh, from Rs 3 lakh announced in the Budget, as it introduced 40 amendments to the Finance Bill in an unprecedented move.

As the Finance Bill was taken up for consideration in the Lok Sabha, the opposition parties including TMC, BJD and RSP protested against the introduction of these many amendments, saying it was being done as a "back-door entry".

Lok Sabha Speaker Sumitra Mahajan, however, overruled the objections raised by the opposition parties, saying the 'incidental provisions' involved in the amendments constitute a 'Money Bill' and therefore can be considered as part of the Finance Bill.

1/2 In the official amend.to FBill Govt has proposed that limit of 3 lakhs for cash tranx,beyond which it is illegal, be reduced to 2 lakhs
— Dr Hasmukh Adhia (@adhia03) March 21, 2017

The proposed amendments to the Finance Bill include a provision to cap legal cash transactions at Rs 2 lakh. While presenting the Budget on February 1, Finance Minister Arun Jaitley had proposed to make any cash transaction beyond Rs 3 lakh as illegal with effect from April this year.

A penalty of equal amount would be levied in case of any violation of the provision, Revenue Secretary Hasmukh Adhia tweeted after the amendment was moved.

Another senior revenue department official said the move was intended to make the law more stringent to clamp down on cash dealings, which was giving rise to black money.

The move to cap legal cash transactions followed recommendations made by the Special Investigation Team on Black Money, which was set by by the government on directions of the Supreme Court.

The amendments to the laws like Companies Act, Employees Provident Fund, Smuggling and Foreign Exchange Act, TRAI Act and Information Technology Act, have also been moved to make the functioning of tribunals more efficient by merging the smaller ones and reducing their numbers from 40 to 12.

While defending the move to make amendments, Jaitley invoked the first Lok Sabha Speaker G V Mavalankar.

He said if a substantial portion of a bill deals with imposition or abolition of tax, it can be introduced as a Money Bill even even if it has other incidental provisions.

"You cannot have a bill which says government will spend Rs 100,000 crore without detailing how it would be spent. You cannot have a bill where you say there will be 5 per cent without specifying what will be the deduction, what will be the power of assessing officer, appeal provision... No tax can be imposed without reference to courts or tribunals.. These are incidental provisions...," Jaitley said.

--PTI