The next time you visit your neighborhood gold or silver jewelry store you might have to carry your PAN or Aadhaar card number for purchases above Rs 50,000-1 lakh. Currently, only purchases above Rs 2 lakh require know-your-customer-compliance in the gold market.
Chartered accountant Bhargav Vaidya, who provides consultancy services to the gems and jewelry sector, and the secretary of one of the country’s largest bullion association, expects the KYC requirements for bullion and jewelry to be revised lower from the present Rs 2 lakh in Budget FY18, to be presented on Wednesday. “I think the KYC (compliance) will be cut to Rs 50,000 from Rs 2 lakh at present in the Budget for FY18,” said Vaidya, proprietor of BN Vaidya & Associates.
Apart from the trade, financial regulators take feedback while drafting the policy for gold trade from Vaidya. Any such move would come amid the government’s crackdown against black money hoarders. Post demonetisation, entities holding unaccounted wealth in the form of scrapped Rs 500 and Rs 1,000 notes converted these largely into jewelry, bullion and real estate.
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If Vaidya's hunch proves right, customers buying gold, silver or bars of either metal would need to quote their PAN or Aadhaar number, or even provide Kisan Credit Card in rural areas, for purchases over Rs 50,000.
Regulatory agencies like income-tax, Enforcement Directorate and the department of revenue intelligence have been busy surveying bullion dealers and jewelers across the country to figure out how huge sales took place on and immediately after the demonetization announcement. "My guess is KYC requirement would be revised for purchases above .`1lakh in the upcoming Budget," said Surendra Mehta, national secretary of India Bullion & Jewellers Association (IBJA).