KYC only in case of purchase of jewellery, precious stones value more than ₹2 lakh

Our Bureau New Delhi | Updated on January 09, 2021

Finance Ministry on Saturday clarified that only purchase of jewellery above ₹2 lakh needs mandatory Know Your Customer (KYC).

“Any purchase of gold, silver, jewellery or precious gems and stones below ₹2 lakh does not require PAN or Aadhaar of a customer as mandatory KYC document,” a source in the Revenue Department of Finance Ministry said.

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Sources said that the notification issued under PML Act, 2002, on December 28 is a requirement of FATF (Financial Action Task Force) where 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. FATF is 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.

Sources said that the misinformation being circulated in certain section of media 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. Accordingly, 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.

Published on January 09, 2021

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