Any purchase of gold, silver, jewelry, or precious gems and stones below Rs 2 lakh does not require PAN or Aadhaar of a customer as mandatory Know Your Customer (KYC) document said The Department of Revenue (DoR), Ministry of Finance in a clarification about the purchases.
Sources 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, they said.
India is a member of FATF since 2010. It is an inter-governmental body that sets international standards aimed to prevent illegal activities on terror funding and money laundering.
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), according to the sources.
Sources added that “The misinformation being circulated in 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”.
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, they said further.
