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HomeNATIONIncome Tax News: Big Info! Can You Buy Gold In Cash Without...

Income Tax News: Big Info! Can You Buy Gold In Cash Without Aadhaar or PAN? Tax Implications Explained

Unlocking Gold Investment Strategies: Navigating Income Tax Limits and ID Requirements

For those considering gold investments, it’s essential to comprehend the legal boundaries set by the Income Tax Act. This article sheds light on the permissible limits for purchasing gold with cash, addressing the rules outlined in the Prevention of Money Laundering Act (PMLA), 2002, and income tax regulations.

Stringent Money Laundering Guidelines

Under the PMLA, the government mandates immediate reporting by jewelers if gold purchases with cash exceed Rs 10 lakh. To ensure transparency, customers must provide KYC details, including PAN or Aadhar cards. This regulation, initiated by a government notice on December 28, 2020, aims to thwart money laundering activities.

Income Tax Act Restrictions

Section 269ST of the Income Tax Act strictly limits cash transactions for gold purchases to Rs 2 lakh in a day. Whether acquired in a single transaction or through multiple transactions, breaching this cap incurs penalties under Section 271D, reinforcing the government’s effort to curb illicit financial activities.

Compulsory ID Proof for Significant Gold Transactions

For gold purchases surpassing Rs 2 lakh, compliance with Rule 114B of the Income Tax Rules, 1962, mandates the provision of PAN or Aadhar cards. This requirement aligns with income tax regulations, promoting accountability and transparency in high-value gold transactions.

PAN/Aadhaar Necessity under PMLA

The PMLA further emphasizes the need for PAN or Aadhaar details in transactions exceeding specified limits, accentuating the significance of identification in gold acquisitions.

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