In a major push for a cashless economy, and for controlling money laundering and tax-evasion, Govt. of India has now made ID proof mandatory for all cash transactions above Rs 50,000.
Will this step control black money generation in India?
ID Proof Must For Cash Transactions > Rs 50,000!
Finance Ministry has now made sweeping changes to Prevention of Money-laundering (Maintenance of Records) Rules, and the biggest of them all is: Mandatory ID proof requirement for all cash transactions above Rs 50,000.
As part of this initiatives, all reporting authorities such as banks will be required to keep Prevention of Money Laundering Act (PMLA) forms, wherein the customer will be required to furnish ID proof when transacting more than Rs 50,000 in cash.
The ID proof can be Aadhaar or any other form of Govt. issued identification cards such as PAN Card, Voter ID Card, Passport, etc.
The reporting authorities must cross-check the ID with the records available as KYC before approving cash transactions of more than Rs 50,000.
Who Can Ask For ID Proof?
Besides banks, there are several other entities dealing in financial products, which have been mandated to ask for ID proof in case of cash transactions above Rs 50,000.
Intermediaries like stock brokers, chit fund companies, cooperative banks, housing finance institutions and non-banking finance companies, besides banks have been made as reporting authorities for mandatory ID checks.
In case these entities don’t have any KYC of the customer, then they are now required to obtain the same, and cross-check the IDs before processing cash transactions above Rs 50,000.
Under Prevention of Money-laundering (Maintenance of Records) Rules, strict rules have been formulated for those who are violating these rules.
Hence, from now on, dealing with cash transactions becomes even more tough.
What ID Proofs Would Be Applicable?
Every cross-border transfers of more than Rs 5 lakh in foreign currency, besides purchase and sale of immovable properties worth Rs 50 lakh have also been placed under this new rule.
In case the furnished ID doesn’t have updated address, then utility bills such as electricity, telephone, post-paid mobile phone, piped gas or water bill can also be used as ID proof.
Property or municipal tax receipt, pension or family pension payment orders issued to retired employees by Government departments, or letter of allotment of accommodation from employer can also be used as ID proof in some cases.
War Against Cash Intensifies
Govt.’s fight against cash transactions have no intensified, with this new rule for mandatory ID for cash transactions above Rs 50,000.
Earlier, Govt. had introduced Rs 150 transaction fee for every 4th cash transaction, irrespective of the amount.
As per Income Tax rules, cash transactions above Rs 2 lakh are anyways illegal; and public at large are requested to report any such transaction at ‘blackmoneyinfo@incometax.gov.in’.
Besides, PAN Card is right now mandatory for any transaction above Rs 2 lakh.
And last year, it was rumored that all cash transactions above Rs 3 lakh would be banned.
We will keep you updated as we receive more news regarding battle against back money.
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