KYC only for buying jewellery above Rs. 2 lakh

Any purchase of gold, silver jewellery, or gems and stones below Rs 2 lakh does not require PAN or Aadhaar of the customer as a mandatory Know Your Customer (KYC) document.

Sources in the Department of Revenue (DoR) said the recent notification issued under PML Act, 2002, on December 28, 2020, is a requirement of the Financial Action Task Force (FATF).

Dealers of precious metals and stones need to carry KYC and customer due diligence only when they conduct cash transactions above Rs 10 lakh.

KYC & customer due diligence is a requirement of FATF – the global money laundering and terrorist financing overseer.

FATF is an inter-governmental body of international standards aimed to prevent illegal activities on terror funding and money laundering. India has been a member of FATF since 2010.

The clarification came after news of KYC requirement on any purchase of gold, silver, jewellery, or precious gems and stones below Rs 2 lakh in cash was circulated on various platforms.

In India, cash transactions above Rs 2 lakh are not allowed under Section 269ST of the Income-Tax Act, 1961. Dealers not receiving cash more than Rs 2 lakh in compliance with the existing provisions of the I-T Act will not be covered under this notification.

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