Discover how recent Indian government notifications now include transactions by Chartered Accountants (CA), Company Secretaries (CS), and Cost Accountants (CMA) under the Prevention of Money Laundering Act, 2002. Learn about the expanded scope, definitions, and implications for professionals in combating financial crimes.
The Indian government has recently issued a notification that transactions carried out by Chartered Accountants (CA), Company Secretaries (CS), and Cost Accountants (CMA) on behalf of their clients will now be covered under the Prevention of Money Laundering Act, 2002 (PMLA). This move aims to strengthen efforts in combating money laundering activities and ensuring accountability among professionals involved in financial transactions.
The Prevention of Money Laundering Act, 2002 has been a crucial tool in combating financial crimes in India. The recent notification expands the scope of this act to include specific transactions conducted by CA, CS, and CMA professionals. The Ministry of Finance (Department of Revenue) issued an official notification on May 3, 2023, in New Delhi to enforce this change.
The notification defines a “relevant person” as someone authorized to conduct transactions on behalf of their clients. This definition includes Chartered Accountants (CA), Company Secretaries (CS), and Cost Accountants (CMA). The term “firm” mentioned in the notification refers to any entity that falls within the parameters assigned by the Income-tax Act, 1961 in Section 2(23)(i).
By including these professions under the purview of the Prevention of Money Laundering Act, the government aims to strengthen efforts in preventing money laundering activities and illegal financial practices. This step ensures greater compliance and accountability among professionals involved in financial transactions, providing added protection for clients against potential abuse or fraud.
The expanded scope of the act holds these professionals responsible for any transactions conducted on behalf of their clients that fall under the purview of the Prevention of Money Laundering Act. This places a greater responsibility on CA, CS, and CMA professionals to conduct proper due diligence before carrying out any transaction.
While this may appear to be an additional burden for these professionals, it is a necessary measure to curb illicit financial activities and promote transparency and accountability in financial dealings. The government’s move to include CA, CS, and CMA professionals under the Prevention of Money Laundering Act demonstrates its commitment to combating money laundering and protecting the integrity of India’s financial system.
Source- Notification No. S.O. 2036(E), Dated: 3rd May, 2023
*****
(Author can be reached at email address [email protected] or on Mobile No. 9990365673)
Disclaimer: “Neither this article nor the information contained herein shall in any way be construed as forming a contract or shall constitute professional advice required before acting upon any matter. CA Sharad Kumar Sharma has taken all due care in the preparation of this article for accuracy in its contents at the time of publication. However, no liability shall be accepted by him in the event of any direct, indirect or consequential damages arising out of or in any way connected with the use of this article or its contents. “
Author Bio
