Gold symbolises wealth, social stature. The shining yellow metal has been bullish all through last year and despite that it is a must have for Indians especially during the wedding season. Even as an investment option, gold doesn’t disappoint for it is a stable option with almost guaranteed long term returns.
The yellow metal is an old way of investment that has stood the test of time and has seen different time periods when it was used as currency. Gold is an old tradition that has been passed from generations in the form of jewellery and coins.
Here are some important things to note when planning to buy gold.
As part of India’s commitment to the Financial Action Task Force (FATF), cash transactions above Rs 10 lakh to purchase gold will be required to complete his/her Know Your Customer (KYC). PAN card and Aadhaar card are valid documents for the mandatory KYC. India has been a member of FATF since 2010.
FATF is an inter-governmental body that sets international standards aimed to prevent illegal activities like global money laundering and terrorist financing overseer.
The Department of Revenue has clarified that a customer purchasing gold, silver, jewellery or precious gems and stones below Rs 2 lakh is not required to provide documents for mandatory KYC.
All asset classes barring gold require a KYC document for any transaction. But in case of gold, a buyer needs to
submit his/her KYC documents only if he/she is buying gold worth Rs 2 lakh or more. The government has been trying to make gold as an asset class at par with stocks, real estate and mutual funds.
Fearing that the government may make KYC mandatory for all transactions, the jewellers have started asking for KYC documents even for transactions below Rs 2 lakh.
In India, one cannot make a cash transaction above Rs 2 lakh as it is not allowed under section 269ST of Income-tax Act 1961. Hence, it is important to carry your Aadhaar and PAN card to avoid any inconvenience.
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