Proliferation of black money has been one of the perennial problems ever disrupting the Indian economy apart from its effect on increasing the economic inequalities among people. The black money situation had become more heinous during the last about three decades as money laundering activities became rampant in the country, wherein people who indulged in crime skillfully concealed the proceeds of crime or projected or claimed such proceeds as untainted property. The enactment of the Prevention of Money Laundering Act (PMLA) in 2002 was a major step to tackle this menance.
Among the various activities or deals or transactions included under the PMLA, the Finance Ministry has now notified dealers in precious metals and stones and also real estate agents with over Rs 20 lakh turnover under the ambit of PMLA. Dealers in gold, silver, diamonds and other precious stones will henceforth have to maintain records of cash transactions worth Rs 10 lakh or more cumulatively with a single customer.
In India Gold was being treated as a safe haven for parking black money and unaccounted money unabatedly with absolutely no control. Though there have been a few measures to tackle the evil of black money, many of which, though, are yet to manifest any tangible results, gold as an investment option was left untouched. Now with the inclusion of gold transactions under PMLA, the yellow metal stands to slightly lose its earlier luster as an option for investment, all of which cannot, of course, be construed as black money.
With the issue of the above notification by the Finance Ministry, the Enforcement Directorate has started keeping a close a surveillance on gold jewellery shops. This is a development which will be a cause of worry for those who have lately used or plan to use their unaccounted money for purchasing gold or any precious stones.
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