Record-keeping of cash deals in gems & jewelry trade as well as Real Estate now a must

The Ministry of Finance (Department of Revenue) on the 28th December 2020 notifies (G.S.R.799(E) dealers in precious metals, precious stones, in the exercise of the powers conferred by sub-clause (iv) of clause (sa) of sub-section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (15 of 2003), as “persons carrying on designated businesses or professions”, if they engage in any cash transactions with a customer equal to or above Rupees ten lakhs, carried out in a single operation or in several operations that appear to be linked.

For income tax purposes, hitherto cash transactions in gold, silver, diamond jewelry, and other precious stones are allowed up to a threshold of Rs 2 lakh without KYC/PAN or Aadhaar are allowed. Since the traders have been notified now as designated businesses under PMLA, they would have to maintain a record of such transactions the buyer’s identity through his/her PAN or Aadhaar number. The new rule shall desist the traders from not keeping the records of each transaction of the customers having unaccounted money undertakes multiple transactions up to Rs 2 lakh that appears to be linked.

The Central Government has also issued a notification on December 28, designating Real Estate Agents, as a person engaged in providing services in relation to sale or purchase of real estate and having annual turnover of Rupees twenty lakhs or above, as persons carrying on designated businesses or professions under the Prevention of Money-laundering (Maintenance of Records) Rules 2005.

In view of the Govt. notifications, record-keeping of cash deals, in gems & jewelry trade as well as Real Estate transactions, become a must under PMLA

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