prevention of money laundering act
javed ahmed
(Querist) 01 April 2011
This query is : Resolved
A,a citizen of bangladesh,transfers property located in india to one,B.B,being a citizen of india,makes payment in indian rupee.this helps,A, to evade taxes which he is dutybound to pay under the income tax act.HAS B VIOLATED ANY PROVISION OF THE PREVENTION OF MONEY LAUNDERING ACT 2002?PLEASE ADVISE
A V Vishal
(Expert) 02 April 2011
B has evaded taxes hence he is liable under the Income Tax Act. Money Laundering is the process by which large amounts of illegally obtained money (from drug trafficking, terrorist activity or other serious crimes) is given the appearance of having originated from a legitimate source. In the facts described by you, B has committed no violation under the money laundering act.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 02 April 2011
In property transfer matters there are sufficient precautions and measures so the taxes can not be evaded.
Amit Pateria
(Expert) 03 April 2011
Mr. Javed Ahmed,
Any 'person' dealing with the 'proceeds of crime' in whatsoever manner and projecting it as untainted property is guilty of offence of money laundering which is punishable with rigorous imprisonment which may extend to seven years and fine which may extend to rupees five lakh.
As per the Act of 2002 the 'proceeds of crime' means any property derived or obtained by any person as a result of criminal activity relating to a scheduled offence or the value of any such property further, 'property' is defined as any property or assets of every description.
Hope this helps.
Regards
M V Gupta
(Expert) 03 April 2011
There is a prohibition in the IT Act against payment of amounts in excess of Rs. 10,0000/- by cash. Thus if B has paid the total amount for the property purchased by him in cash he will be answerable to the IT. It would come to know about the transaction as the Registrar would be reporting all high value transactions to the CBDT.
A V Vishal
(Expert) 03 April 2011
Mr Gupta Can you kindly quote the section.
M V Gupta
(Expert) 07 April 2011
I regret the typographicl error in my prvious posting. The amount in excess of Rs. 20,000/- is not allowed as deductible expenses under Sec.40A of the IT Act. But this is not applicable to the transaction mentioned by you. However it has to be checked with reference to the Money Laundering Act, which I am not in a position to verify immediately. The rest of the observations in my earlier posting may be noted.
