This is a requirement of FATF (Financial Action Task Force) Dealers in Precious Metals and Precious Stones (DPMS) to carry out KYC and Customer Due Diligence only when they conduct such big cash transactions.
(Photo: IANS)
Customers buying gold, silver, jewellery or precious gems and stones below Rs 2 lakh are not required to present their PAN or Aadhaar card as a mandatory KYC document, Finance Ministry’s Department of Revenue (DoR) has clarified.
The notification issued under (Prevention of Money Laundering) PML Act, 2002, on December 28, 2020, stated that only persons or entities buying gold, silver, jewellery or precious stones ‘in cash transactions’ worth Rs 10 lakh or above need to fill know your customer or KYC documents.
This is a requirement of FATF (Financial Action Task Force) Dealers in Precious Metals and Precious Stones (DPMS) to carry out KYC and Customer Due Diligence only when they conduct such big cash transactions.
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The 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.
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 Rs 2 lakh, of gold, silver, jewellery or precious gems and stones in cash require KYC are baseless.
Sources said that since in India, cash transactions above Rs 2 lakh are not allowed under section 269ST of Income-tax Act, 1961, dealers not receiving cash more than Rs 2 lakh in compliance with the existing provisions of the Income-tax Act will not be covered under this notification.
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