The Reserve Bank of India (RBI) has decided to withdraw Rs 2,000 notes. After which people are now buying gold to exchange Rs 2,000 notes. After the decision to discontinue 2 thousand notes, people are buying gold through cash. However, according to the rules, if you are buying gold by paying cash above a certain limit, then you may have to show PAN card instead. In such a situation, you should also know that how much gold can be bought legally without providing ID or PAN card?
The government has tightened the restrictions
The government has tightened restrictions on the purchase of gold by cash by bringing the gems and jewelery sector under the purview of the Prevention of Money Laundering Act (PMLA), 2002. The government had issued a notification in this regard on December 28, 2020. Jewelers are designated as reporting entities under the Act, which requires them to comply with KYC norms. That is, for transactions above a limit, buyers will have to provide PAN or Aadhaar card. Also, it is necessary to report to the government for cash transactions worth Rs 10 lakh or more.
Transactions up to Rs 2 lakh only in a day
Income tax laws prohibit cash transactions above a certain amount. Section 269ST of the Income Tax Act of 1961 prohibits cash transactions exceeding Rs 2 lakh in aggregate from a person in a day. Thus, if you buy gold jewelery worth more than Rs 2 lakh in cash in a single day, you will be violating the Income Tax law. As per section 271D of the Income Tax Act, the recipient of cash in such transaction shall be entitled to pay penalty equal to the amount transacted in cash.
PAN or Aadhaar is required
According to experts, furnishing of PAN details for purchase of gold is mandatory under Rule 114B of the Income Tax Act, 1962 for transactions of Rs 2 lakh and above. In this way, if you buy gold by making a transaction of more than Rs 2 lakh, then you will have to give the PAN details of the jeweller. According to the PMLA guidelines, PAN or Aadhaar number has to be given even for transactions above a limit.
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