Did you know that the gold you purchase is subject to regulation by Income Tax rules? Yes, you heard correctly! You can buy gold up to a specific limit without having to provide identity proof such as a PAN or Aadhar Card. However, if you surpass this limit, you may be put under the radar for potentially violating the law.
What (Gold)en rules do you need to know?
If you are preparing to buy Gold this wedding season, then you must keep some points in mind. Rules around cash purchase of Gold were brought into effect by the government by including gems and jewellery under the Prevention of Money Laundering Act (PMLA), 2002.
What are the updated rules?
The Government of India once again introduced a change on December 28, 2020 through a notification. The PMLA now requires the Jewellers to act as reporting entities who have to abide by the KYC norms by asking for PAN or Aadhar to carry out cash transactions(above the specified threshold) for Gold purchases.
Jewellers must report to the government about any cash transaction of Rs. 10 Lakh and above. The Government has made rules stricter under the Income Tax Act, 1961 on cash transactions in the past few years.
The rules on cash transactions span all types of cash transactions. Now, coming back to how much Gold can you buy with respect to the Income Tax rules without the necessity to present your PAN or Aadhar –
Buy this much Gold without PAN or Aadhar
Income tax regulations strictly forbid cash transactions beyond a designated threshold. As stipulated in Section 269ST of the Income Tax Act, any cash transactions exceeding Rs 2 lakh in a single day, whether aggregated from one person or linked to transactions pertaining to a specific event or occasion from a person, are prohibited.
Therefore, engaging in a cash purchase of gold jewellery that surpasses Rs 2 lakh in a single day would be a violation of income tax laws. In such a transaction, the recipient of the cash would also incur legal liability.