The BJP led government came into power promising strict action against black money and its hoarders. Since 2014, the government has introduced various steps, from bills, to tax declaration schemes and the most recent demonetisation, all have been introduced with a single-minded pursuit of curtailing black money and thereby putting an end to the parallel economy prevalent in the country.
The budget 2017, wasn’t far behind, the changes thus announced focused on curbing black money and increasing transparency in all money transactions.
NGO: Cash donations reduced to ₹2,000 from₹10,000
Some unscrupulous NGOs had been happily converting black money at a percentage, as they receive a large number of cash donations.
By limiting the amount of cash donations, the government has effectively put an end to the collusion between people and NGOs for black money conversion.
Political Parties: Cash donations reduced to ₹2,000 from ₹20,000
According to the Finance Bill introduced in parliament today:
- Political parties can receive Rs.2,000 in cash donations as against the previous Rs.20,000 from a single source.
- Political parties can still receive donations via cheque or digital payment methods
- Parties will have to declare Income Tax as per the Income Tax laws of the country
- An amendment has been proposed to the RBI Act to enable issuance of Electoral Bonds. According to this scheme, these bonds can be purchased by a donor from one of the authorised banks, but can be redeemed only through the registered accounts of a political party.
These steps will not only curb the movement of black money to political parties, but also put a hold on the creation of new parties to gain tax exemptions.
Transactions: Decreasing limit for cash transactions
Based on recommendation of the Special Investigative Team on Black Money, the limit for cash transaction has been reduced to₹3 lakh