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Date: 03-May-2023 Category: Extra Ordinary State: Union Government Country: India

PMLA,2002

Issued by Ministry of Finance · Department of Revenue

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Executive Summary & Key Takeaways

What it means

  • The notification issued by the Ministry of Finance, Department of Revenue, on May 3, 2023, designates certain financial transactions carried out by a 'relevant person' on behalf of their client as activities subject to the Prevention of Money-laundering Act (PMLA), 2002.
  • These activities include buying and selling immovable property, managing client money and assets, managing bank accounts, organizing contributions for companies, and creating or managing companies, LLPs, or trusts.

Key Changes

  • The notification expands the scope of activities covered under the Prevention of Money-laundering Act, 2002, by including specific financial transactions conducted by 'relevant persons' on behalf of their clients.
  • A 'relevant person' is defined as an individual holding a certificate of practice under Section 6 of the Chartered Accountants Act, 1949; the Company Secretaries Act, 1980; or the Cost and Works Accountants Act, 1959, and practicing individually or through a firm.
  • The covered financial transactions include: (i) buying and selling of any immovable property; (ii) managing of client money, securities or other assets; (iii) management of bank, savings or securities accounts; (iv) organisation of contributions for the creation, operation or management of companies; (v) creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities.

Impact Analysis

Impact on Chartered Accountants, Company Secretaries, and Cost Accountants

  • Need for training: Professionals will require training to understand their obligations under the PMLA and how to identify and report suspicious transactions.

Impact on Clients

  • Increased costs: Clients may incur additional costs related to compliance.

Impact on Regulatory Authorities

  • Need for enhanced resources: Authorities may require additional resources to effectively enforce the PMLA.

Suggested Action Items

  • Regulatory authorities should develop guidance and training materials to assist professionals in complying with the new requirements.

Key Entities Referenced

Prevention of Money-laundering Act, 2002: The principal legislation addressing money laundering in India. The notification expands the scope of activities covered under this Act. Chartered Accountants Act, 1949: The Act governing the profession of Chartered Accountancy in India. Individuals holding a certificate of practice under this Act are considered 'relevant persons' under the notification. Company Secretaries Act, 1980: The Act governing the profession of Company Secretaries in India. Individuals holding a certificate of practice under this Act are considered 'relevant persons' under the notification. Cost and Works Accountants Act, 1959: The Act governing the profession of Cost and Works Accountancy in India. Individuals holding a certificate of practice under this Act are considered 'relevant persons' under the notification. Income-tax Act, 1961: The Act governing income tax in India. It is referenced in Explanation 2 to define the meaning of 'firm'.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-03052023-245631 xxxGIDHxxx CG-DL-E-03052023-245631 xxxGIDExxx असाधारण EXTRAORDINARY भाग II—खण् ड 3—उप-खण्ड (ii) PART II—Section 3—Sub-section (ii) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 1948] नई ददल्ली, ंुधिार, मई 3, 2023/ििै ाख 13, 1945 No. 1948] NEW DELHI, WEDNESDAY, MAY 3, 2023/ VAISAKHA 13, 1945 जित्त मत्रं ालय (रािस्ट्ि जिभाग) अजधसचू ना नई ददल् ली, 3 मई, 2023 का.आ. 2036(अ)—केंद्रीय सरकार, धन-िोधन जनिारण अजधजनयम, 2002 (2003 का 15) की धारा 2 की उपधारा (1) के खंड (धक) के उपखंड (iv) द्वारा प्रदत् त िजतत यक का प्रयोग करते एए, अपन े व्यिसाय के अनुक्रम म ें दकसी सुसंगत व् यजतत द्वारा अपन े मिु द ल की र से जित् तीय सव्ं यिाारक के संंंध में जन्‍न जलजखत दक्रयाकलापक को उतत उपधारा के प्रयोिनक के जलए दक्रयाकलाप के रूप म ेंअजधसूजचत करती ा,ै-- (i) दकसी अचल संपजत् त का क्रय र जिक्रय ; (ii) मुिद ल के धन, प्रजतभूजतयक या अन् य आजस्ट्त यक का प्रंंध करना ; (iii) ंैंक, ंचत या प्रजतभूजत लेखाओं का प्रंंधन ; (iv) कंपजनयक के सृिन, प्रचालन या प्रंंध के जलए अजभदायक का संगठन ; (v) कंपजनयक, सीजमत दाजयत् ि भागीदािरयक या न् यासक का सृिन, प्रचालन या प्रंंध र कारंार अजस्ट् तत् िक का क्रय र जिक्रय करना । स्ट्प ष्ट ीकरण 1-- इस अजधसूचना के प्रयोिनक के जलए ‘‘सुसंगत व् यजतत ’’ के अंतगगत जन्‍न जलजखत सज्‍ मजलत ाोगा,-- (i) कोई व् यजष्ट क, जिसने चाटगडग अकाउंटेंट अजधजनयम, 1949 (1949 का 38) की धारा 6 के अधीन व् यिसाय प्रमाणपत्र अजभप्राप् त दकया ा ै र िो व् यजतत गत रूप से या दकसी ्म,ग चाा े या जिस भी रीजत में गिठत की गई ाो, के माध् यम स े व् यिसाय कर राा ा ै; 2901 GI/2023 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] (ii) कोई व् यजष्ट क, जिसने कंपनी सजचि अजधजनयम, 1980 (1980 का 56) की धारा 6 के अधीन व् यिसाय प्रमाणपत्र अजभप्राप् त दकया ा ै र िो व् यजतत गत रूप से या दकसी ्म,ग चाा े या जिस भी रीजत में गिठत की गई ाो, के माध् यम स े व् यिसाय कर राा ा ै; (iii) कोई व् यजष्ट क, जिसने लागत र संकमग लेखापाल अजधजनयम, 1959 (1959 का 23) की धारा 6 के अधीन व् यिसाय प्रमाणपत्र अजभप्राप् त दकया ा ै र िो व् यजतत गत रूप से या दकसी ्मग, चाा े या जिस भी रीजत में गिठत की गई ाो, के माध् यम से व् यिसाय कर राा ा ै। स्ट्प ष्ट ीकरण 2—इस अजधसूचना के प्रयोिनक के जलए, ‘‘्मग’’ का िाी अथग ाोगा िो उसका आय-कर अजधजनयम, 1961 की धारा 2 के खंड (23) के उपखंड (iv) म ेंा ै। [्ा.सं. पी-12011/12/2022-ईएस सेल-डी आर] ििांक जमश्र, जनदेिक (मुख्य ालय) MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION New Delhi, the 3rd May, 2023 S.O. 2036(E).—In exercise of the powers conferred by sub-clause (vi) of clause (sa) of sub-section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby notifies that the financial transactions carried out by a relevant person on behalf of his client, in the course of his or her profession, in relation to the following activities- (i) buying and selling of any immovable property; (ii) managing of client money, securities or other assets; (iii) management of bank, savings or securities accounts; (iv) organisation of contributions for the creation, operation or management of companies; (v) creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities, shall be an activity for the purposes of said sub-section. Explanation 1.- For the purposes of this notification ‘relevant person’ includes – (i) an individual who obtained a certificate of practice under section 6 of the Chartered Accountants Act, 1949 (38 of 1949) and practicing individually or through a firm, in whatever manner it has been constituted; (ii) an individual who obtained a certificate of practice under section 6 of the Company Secretaries Act, 1980 (56 of 1980) and practicing individually or through a firm, in whatever manner it has been constituted; (iii) an individual who has obtained a certificate of practice under section 6 of the Cost and Works Accountants Act, 1959 (23 of 1959) and practicing individually or through a firm, in whatever manner it has been constituted. Explanation 2.- For the purposes of this notification ‘firm’ shall have the same meaning assigned to it in sub-clause (i) of clause (23) of section 2 of the Income-tax Act, 1961 (43 of 1961). [F. No. P-12011/12/2022-ES Cell-DOR] SHASHANK MISRA, Director (Headquarter) Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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