Income Tax Rules: Shopping for gold is now necessary because the holiday season has arrived and the wedding season will soon follow. In addition, the majority of people still prefer to transact in cash. Can you buy gold with cash without any restrictions, or is this activity also governed by the Income Tax Department? Do you need to provide identification to invest in gold?
Understanding the PMLA Impact on Gold Purchases
The Prevention of Money Laundering Act (PMLA), 2002 has been applied to the gems and jewellery industry by the Income Tax Department in order to regulate gold. There are two things to consider. First, if someone wants to buy gold with cash, he can only do so up to a certain amount; after that, he must adhere to KYC regulations. Therefore, jewellers may inquire about his PAN or Aadhaar information. Anyone who conducts a transaction worth more than Rs 10 lakh is required to disclose it.
The Impact of Section 269ST on Gold Buyers
Additionally, section 269ST of the Income Tax Act applies to cash transactions. As a result, if you buy gold and pay more than Rs 2 lakh in cash, you are breaking the law because you are not allowed to do transactions worth more than Rs 2 lakh in a single day. Additionally, the individual who takes the cash is subject to a fine for this. In addition, whether you are paying with cash or by another method, you must provide your PAN information if you are purchasing gold valued at more than Rs 2 lakh.
The Costs of Buying Gold in India
What fees are you currently paying when you buy gold? First off, there is a 10% import duty on gold, in addition to which there is a 3% GST and manufacturing fees. In addition, the government levies a 5% Agriculture Infrastructure Development Cess on imported gold. Finally, if you purchase gold valued at more than Rs 1 lakh in a calendar year, you would be required to pay 1% TDS.