Avoidance of Cash Laundering Act,2002 Money Laundering can be comprehended as a process utilized by bad guys to masquerade the possession and guideline of cash derived from large criminal activities and making the source of income genuine. The procedure of money laundering can be broken down into 3 steps placement (introduction of money into monetary system), layering (concealing the source of income) and combination (converting the money into legitimate source). Indian was ranked 70 th out of 140 nations in 2013 by Anti-Money Laundering Basel Index. This mean that India is a high threat zone in cash laundering. The Indian federal government has actually taken tremendous steps to prevent cash laundering by introducing Prevention of Money Laundering Act, 2002.
Material in this Article.
conceal.
Avoidance of Money Laundering Act, 2002
Money Laundering Strategies
There are numerous ways through which cash can be laundered, a few of them are:
- Money Smuggling: Moving cash from one area to another or depositing the money in Swiss Checking account.
- Structuring: Cash is broken down into official invoices to purchase cash orders etc., smaller amounts are hard to spot.
- Laundering Via Property: Purchasing a land for cash and then selling it making the profits legal.
The Act
Before the introduction of PMLA, 2002, government of India had other improper acts like:
These acts were handling issues on the periphery and did not have money laundering at the heart. The PMLA act existed on 4 th August 1998 in Lok Sabha and was formalised on 17 th January 2003.
The Prevention of Cash Laundering Act (PMLA) is an attempt to prevent laundering of cash and assistance in seizure of properties acquired through money-laundering activities by individuals or business.
The act seriously reprimands people assisting or enjoying activities related to money laundering or profits from criminal activities.
The private condemned of laundering cash may deal with:
- Jail Time for as much as 7 years and also pay a fine of INR 5 Lacs. The ceiling of the fine was later eliminated in the 2011 amendment.
- In case an individual is discovered in violation of Narcotic Drugs and Psychotropic Substances Act, 1985 then the punishment might increase to up to 10 years.
Appointed authorities by Govt.
Also, under section 12 of the act banks like banks or stock broking firms are mandated under PMLA, 2002 to keep a record of cash transactions above Rs. 10 Lacs or above in domestic and international currency.
Conclusion
The government is trying hard to come up with new changes to robust the act and prevent more cash laundering, however acts can just be modified based on past. The government has actually likewise set up Financial Intelligence Unit to evaluate and distribute details related to cash laundering.
Advised Articles
- Exemptions available under Sec. 80 C for Stamp Task Paid
- List of Numerous Reductions Under Area 80 C
- Deduction in Respect of Various Loans
- Deduction for Rent Paid Under Section 80 GG
- Reduction from gross income in regard of particular payments
- Area 43 B Reductions Based Actual Payments
- Area 80 GGA
