Only purchase of jewellery above ₹2 lakh needs mandatory KYC

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Only purchase of jewellery above ₹2 lakh needs mandatory KYC
BCCL
New Delhi, Department of Revenue (DoR) has clarified that any purchase of gold, silver, jewellery or precious gems and stones below ₹2 lakh does not require PAN or Aadhaar of a customer as a mandatory KYC document.

Sources said that the notification issued under (Prevention of Money Laundering) PML Act, 2002, on December 28, 2020 is a requirement of FATF Dealers in Precious Metals and Precious Stones (DPMS) to carry out KYC and Customer Due Diligence only when they conduct cash transactions above ₹10 lakh.

This is a requirement of FATF (Financial Action Task Force) - the global money laundering and terrorist financing overseer which as the inter-governmental body sets international standards aimed to prevent illegal activities on terror funding and money laundering.

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One of the recommendations requires DPMS sector to fulfil obligations of Customer Due Diligence (CDD) when they conduct cash transactions above a certain limit (USD/EUR 15,000).

India is a member of FATF since 2010.

DoR sources said the contention that any purchase, even if below ₹2 lakh, of gold, silver, jewellery or precious gems and stones in cash require KYC are baseless.

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Sources said that since in India, cash transactions above ₹2 lakh is not allowed under section 269ST of Income-tax Act, 1961, dealers not receiving cash more than ₹2 lakh in compliance with the existing provisions of the Income-tax Act will not be covered under this notification.


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