Government announced that it will notify a new threshold for the value of transactions in gold, silver and precious stones
Text Credit: Rochelle D’Souza
Kerala has long been known for its affinity towards all that glitters, and if you’re planning on investing in anything gilded and gleaming there’s good news for you. The government has announced that it will soon notify a new threshold for the value of transactions in gold, silver and precious stones like diamonds which will have to be reported to the authorities. The government had, in August this year, rolled out its order which made it mandatory for gems and jewellery dealers to report all sales above ₹ 50,000 to the financial intelligence unit as they were brought under the purview of the Prevention of Money Laundering Act (PMLA). The move has been put into place as a tactical approach to target and check the diversion of black money into bullion.
According to a report published by PTI, the government created the order in August 23 but it had to be rescinded as it created a great deal of confusion as no set threshold for transactions based on which is was to be reported. Jewellers were asked to be the reporting entity in the same way as banks reported cash transactions – and report purchases of ₹ 50,000 and above. The order had garnered a great deal of criticism owing to the fact that the ₹s 50,000 threshold is too onerous in case of jewellery. “We studied the scenario and decided it was best to re-notify the prescribed limit. We are currently in conversation with the industry based on the same and will take a decision soon,” revenue secretary Hasmukh Adhia told PTI.
Meanwhile, Income Tax officials have stated that the ₹ 2 lakh limit on cash purchases notified by the department would stay in force even for bullion and jewellery purchases. The Income-Tax Department had in June this year warned people against indulging in cash transaction of ₹ 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty.
The waiving of the stringent PMLA rules is expected to give gold sales a boost during the festive season in the run up to Diwali as the earlier ₹ 50,000 limit for reporting had dampened sentiments. Meanwhile, gold prices were ruling firm at ₹ 23,696 per 8 grams and silver at ₹ 39,100 per kg in Kerala as of October 9. The notification of a few threshold comes as a relief for both jewellers and consumers. Previously, consumers were affected by the threshold as they were asked to produce PAN and Aadhaar documents for purchases of ₹ 50,000 and over.