SIT Black Money Report: Here are other countries with cash transaction limits

The Special Investigation Team (SIT) in its fifth report made several recommendations to the government on ways to curb black money. Some of the most prominent recommendations include ban on cash transactions above Rs 3 lakh and imposing an upper limit of Rs 15 lakh on cash holding.

Regarding the limits on cash transactions and cash holding the SIT report drew on the examples of countries in which such restrictions have been imposed in order to curb black money. These countries include France, Portugal, Hungary, Slovakia, Czech Republic, Spain, Bulgaria, Belgium, Greece and Italy.

1. France:  In France the limit for the residents is €3,000 (approximately Rs 2.23 lakh) and for non-residents (tourists) acting as a consumer it is €15,000 (approximately Rs 11.15 lakh). It also pointed out to another report in which the French Finance Minister, Michael Sapin said, “France limits cash transactions to €1,000 (approximately Rs 74,325.5), puts restriction on Gold”.

It also said that the French Government will further limit cash payments of residents to €1,000 from €3,000 today, a move that will come into force in September to combat terrorist financing and money laundering. For non–residents (mainly tourists), the limit will drop from €15,000 to €10,000. Also, starting next year, banks will have to notify authorities of any income or withdrawals of more than 10,000 euros per month.

2. Hungary: While there is no limit on cash transactions for consumers, the limit of 1.5 million Hungarian Forint (about €5,000 or Rs 3.71 lakh per month) for legal persons, unincorporated business associations and VAT registered private persons that are obliged to open a bank account.

3. Portugal: For cash payments above €1,000 requires invoices or similar documents on the amount to be made to the trader’s bank account in which the identification of the receiver (bank transfer, bank debit or by a nominative check) has to be mentioned.

4. Slovakia: An Act (No.394/2012) in the country restricts cash payments of B2B, C2B and B2C at €5,000 and person who is acting for purposes which are outside his or her trade, business to €15,000.

5. Czech Republic: The limit for cash payments is 3,50,000 CZK (about €14,000 or Rs 10.40 lakh) in one day. As for the coins, the limit is 50 pieces.

6. Spain: Since 19th November, 2012, the limit is €2,500 or Rs 1.85 lakh (for Spain residents) and €15,000 or Rs 11.15 lakh (for non–residents). If the amount is higher than these (in each case), the payment should be done by bank transfer. The fine for failing to carry out this precept could be about 25% of the total transferred amount. The law applies for payments between consumers and traders.

7. Bulgaria: Cash transaction limit is up to 10,000 leva (approximately €5,112 or Rs 3.80 lakh). If the transaction is over that limit, then the consumer should pay through a bank. The same applies also in any case where the purchase price is over €5,112, even when the consumer pays not the total price but a part of it, then all parts of the price should go through a bank payment.

8. Belgium: Belgian Government has imposed a limit on cash payments limiting it to €3,000.

9. Greece: Cash payments (including VAT) for the purchase of products and services are permissible up to €1,500 (about Rs 1.11 lakh). Beyond that limit, payments should be done via bank accounts, cheques or credit / debit cards.

10: Italy:  As of 6th December, 2011, the limit of cash that can change hands in any transaction was reduced to €1,000. The previous limit was €2,500 (about Rs 1.86 lakh). The fine for breaching the legislation is high – a minimum of €3,000 per transaction.