Govt Enhances Scrutiny of International Transactions Over Rs 50,000; See Money Laundering Rules
Govt Enhances Scrutiny of International Transactions Over Rs 50,000; See Money Laundering Rules

New Delhi: In an effort to enhance oversight of international transactions exceeding Rs 50,000, a pivotal amendment has been introduced to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005. This significant regulatory modification, heralded by the government, seeks to fortify measures against individuals or entities implicated in nefarious financial dealings, particularly those related to terror financing.

This groundbreaking notification imposes a rigorous scrutiny process on all international transactions surpassing the Rs 50,000 threshold. Should any transaction arouse suspicion, the concerned entity will be obligated to substantiate their identity and provide comprehensive information about the nature of their business dealings, as reported by The Economic Times.

The notification mandates reporting entities to meticulously preserve the acquired information while refraining from alerting or tipping-off any potentially involved parties.

The notification stipulates, "Every reporting entity shall...identify its clients, authenticate their identities using credible and independent means of verification, procure pertinent details regarding the purpose and intended scope of the business relationship, where applicable, and take reasonable measures to comprehend the nature of the customer's business, ownership, and control," as quoted by The Economic Times.

TCS Rates Altered for Foreign Remittances Under LRS
In a parallel development, the government has revised the Tax Collection at Source (TCS) rate from 5 percent to 20 percent for remittances made under the Liberalised Remittance Scheme (LRS) and the purchase of overseas tour program packages.

The Union Ministry of Finance announced, "The Rs 7 Lakh threshold per financial year per individual stipulated in clause (i) of sub-section (1G) of section 206C shall be reinstated for TCS on all categories of LRS payments, regardless of the mode of payment or purpose. Hence, for remittances up to Rs 7 Lakh under LRS, no TCS shall be levied. Beyond this Rs 7 Lakh threshold, TCS shall be - 0.5 percent (in the case of remittances for education financed by an education loan), 5 percent (for education/medical treatment remittances), and 20 percent for other purposes."

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