Is KYC mandatory for purchase of gold and silver jewellery? Here's all you need to know
New Delhi | Jagran Business Desk: The Ministry of Finance on Saturday issued a clarification and said that PAN-Aadhaar based Know Your Customer (KYC) document of the customer is not required when he or she purchases gold, silver, jewellery, or precious gems and stones for less than Rs 2 lakh.
Clarifying its last year order, the Department of Revenue (DoR) of Finance Ministry said that the notification issued under 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 Rs 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," it said.
According to the government, one of the recommendations requires the 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.
"The misinformation being circulated in a certain section of media that any purchase, even if below Rs 2 lakh, of gold, silver, jewellery or precious gems and stones in cash require KYC are baseless," the government said.
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, it said further.
(With ANI inputs)
Posted By: Aalok Sensharma