Govt to scan purchases over ₹6L

NEW DELHI: Retailers will soon have to report purchases above ₹6 lakh to the Financial Intelligence Unit (FIU), said a government official working on the proposal targeted at preventing money laundering.

This limit will mainly be applicable on jewellery and luxury goods.

“Globally, in most countries, the limit for reporting such transactions is set at $10,000,” added the government official who spoke on condition of ano- nymity. “Discussions are on to decide the limit, with consensus veering around ₹6 lakh.”

Apart from helping government agencies such as the Enforcement Directorate detect money laundering (when this information is used along with other information), these reports could also help the income-tax department identify individuals whose purchases are disproportionate to their known sources of income.

The National Democratic Alliance has announced several measures to crack down on black money and money laundering, including deregistering shell companies that exist solely to facilitate such transactions, and strengthening the Benami Transactions Act.

The government has barred cash transactions above ₹2 lakh, and any transaction of ₹50,000 or above has to be supported with the PAN number of the buyer, although many sellers get around this.

The government, in a notification issued on August 23, 2017, mandated gems and jewellery dealers to report their transactions, but the notification was withdrawn in October because no threshold was set and jewellery dealers complained of inconvenience.

Under the Prevention of Money Laundering Act, banks and financial institutions are required to maintain records of all transactions over ₹10 lakh, all cross-border wire transfers of more than ₹5 lakh.

THE SCRUTINY WILL PRIMARILY BE ON PURCHASE OF LUXURY GOODS AND JEWELLERY