Retailers will soon be required to report about purchases made above Rs. 6 lakh primarily of luxury goods and jewellery

In what will come as another crackdown on the black money, the Modi government is likely to scan the purchases made above Rs. 6 lakh primarily on luxury goods and jewellery. The retailers will now be required to report to the Financial Intelligence Unit (FIU) about any purchase made by a customer above Rs. 6 lakh. Globally, in most of the countries, the limit for such transactions is set at $10,000. This move shall not only help the Enforcement Directorate to detect the cases of money laundering but also the Income Tax Department to identify such individuals whose purchases are disproportionate to their sources of income. The government had via a notification in August 2017, made it mandatory for the gems and jewellery dealers to report about their transactions, however, the notification was withdrawn in October as no limit was set and the jewellery dealers complained of inconvenience. Besides demonetization, the present government has taken various step to regulate black money and money laundering that includes- deregistration of the shell companies, strengthening the Benami Transactions Act, etc. According to the Prevention of Money Laundering Act, 2002, the banks and other financial institutions are required to report about all the transactions made above Rs. 10 lakh and all the cross-border transaction above Rs. 5 lakh. The law also requires all purchase and sale of immovable property of Rs. 50 lakh or more to be reported. Post-demonetisation banks are also required to report cash deposits over Rs. 50,000. An official of the Enforcement Directorate told Hindustan Times that, “ Though cash transactions are banned above Rs. 2 lakh, recent data shows that accountants are being used to creatively flow black money through the legal banking channels. This move of reporting the purchases will help us track cases of disproportionate assets, corruption money, and frauds.”