The Department of Revenue (DoR), Ministry of Finance, has clarified that any purchase of gold, silver, jewellery, or precious gems and stones below ₹2 lakh does not require PAN or Aadhaar card of a customer as mandatory Know Your Customer (KYC) document.
“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,” according to sources.
Clarifying a December 28, 2020 notification, the Department of Revenue in the
ministry said cash purchase of jewellery, bullion and precious gems and stones
of value more than ₹2lakh is not allowed without KYC in the country for the
past few years.
The notification issued under PML Act, 2002 on December 28 stated that only persons or entities buying gold, silver, jewellery or precious stones ‘in cash transactions’ worth ₹10 lakh or above need to fill know your customer or KYC documents.
“This is a requirement of FATF – 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,” they added.
According to sources, 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.
Since in India, cash transactions above ₹2 lakh are 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.
