India is the world’s second largest consumer of gold and one of the world’s largest exporters of gold jewellery. The gems and jewellery sector contributes roughly 7% of GDP. Yet out of an estimated 175,000 dealers in precious metals and stones across the country, many eligible businesses are still understood to be outside the FIU-IND reporting framework as reporting entities under the Prevention of Money Laundering Act (PMLA).
The FATF noticed. In its September 2024 mutual evaluation of India, the global anti-money laundering body flagged the precious metals and stones sector as vulnerable to money laundering and terrorist financing. It called out the ease with which trades in gold, diamonds and gemstones can move large sums without leaving an ownership trail. India was told to expand its scrutiny of jewellers and tighten enforcement of know-your-customer protocols.
For jewellers, the question is no longer abstract. If your business handles cash transactions of ₹10 lakh (INR 1 million) or more, you have legal obligations under PMLA that carry real penalties for non-compliance. This guide explains the registration trigger, your compliance duties and what happens if you ignore them.
When does a jeweller need FIU-IND registration?
The jewelers’ FIU-IND registration obligation is tied to a single threshold.
Under the PMLA, dealers in precious metals and stones (DPMS) must register with FIU-IND at the first instance of a cash transaction with a customer equal to or above ₹10 lakh (INR 1 million). This applies whether the transaction happens in a single operation or across several operations that appear to be linked.
That last part is critical. A customer who buys gold worth ₹4 lakh (INR 400,000) today and returns next week for another ₹7 lakh (INR 700,000) purchase has crossed the threshold. Linked transactions are aggregated for this purpose. Splitting a large purchase into smaller cash payments does not remove the obligation. In fact, structuring transactions to avoid the threshold is itself a red flag that triggers suspicious transaction reporting.
Once a DPMS engages in qualifying cash transactions of ₹10 lakh or above, it falls within the reporting entity framework under PMLA and should complete FIU-IND registration without delay through the FINGate 2.0 portal. You cannot wait until the end of the quarter or the financial year. Businesses expecting to undertake such transactions should complete FIU-IND registration proactively to avoid compliance gaps.
Who exactly qualifies as a DPMS under PMLA?
Section 2(1)(sa) of the PMLA defines “persons carrying on a designated business or profession.” The category of dealers in precious metals and stones covers a broad range of businesses. This includes retail jewellers selling gold, silver, diamond and gemstone jewellery, bullion dealers and gold traders, wholesale dealers in precious and semi-precious stones, manufacturers and exporters of jewellery, refiners of precious metals and any business engaged in buying, selling or dealing in precious metals, precious stones or articles made from them.
If your business deals in gold, silver, platinum, diamonds, rubies, emeralds, sapphires or other precious and semi-precious stones and you accept cash payments of ₹10 lakh or above from customers, you fall within this definition.
The ₹50,000 KYC threshold: A separate obligation
Registration with FIU-IND is triggered at ₹10 lakh, but know-your-customer obligations kick in much earlier.
As a compliance best practice and generally expected under the PML framework for reporting entities, DPMS should conduct customer due diligence for cash transactions of ₹50,000 or above. This means collecting and verifying the customer’s identity using reliable, independent documents such as PAN card, Aadhaar, passport or voter ID. You must also identify the beneficial owner when the customer is a legal entity such as a company, trust or partnership firm.
The CDD process requires you to understand the nature and purpose of the transaction, verify the source of funds when the transaction appears unusual relative to the customer’s profile and maintain records of the identification documents obtained.
Enhanced Due Diligence (EDD) may be required for higher-risk scenarios. If the customer is a Politically Exposed Person (PEP), is associated with a high-risk jurisdiction or if the transaction structure raises concerns, additional verification and scrutiny may be necessary under the PMLA framework. Certain transactions may also attract enhanced due diligence requirements under Section 12AA of the PMLA and related rules. Jewellers should also consider PAN and Form 60 requirements applicable to high-value transactions under the Income Tax Rules.
Jewellers FIU-IND registration: Core compliance obligations
Once registered with FIU-IND, a jeweller takes on the full set of PMLA reporting entity obligations. These are not optional extras. They are legal requirements with penalties for non-compliance.
Appoint a Principal Officer and Designated Director
Every DPMS must appoint two key compliance roles. The Designated Director is a board-level or senior management officer responsible for overall PMLA compliance. The Principal Officer manages day-to-day compliance operations, handles FIU-IND communications and is ultimately responsible for identifying and reporting suspicious transactions. Both appointments must be formally communicated to FIU-IND.
File Cash Transaction Reports (CTRs)
You must submit Cash Transaction Reports to FIU-IND for all cash transactions exceeding ₹10 lakh or its equivalent in foreign currency, all interconnected cash transactions within a month where the aggregate value exceeds ₹10 lakh and all transactions involving forged or counterfeit currency notes.
CTRs must be filed through the FINGate 2.0 portal within 15 days of the end of the month in which the transaction occurred.
File Suspicious Transaction Reports (STRs)
If you have reasonable grounds to suspect that a transaction involves proceeds of crime, is related to terrorist financing or is structured to avoid reporting thresholds, you must file an STR with FIU-IND. STRs must be filed within seven working days of the suspicion being formed.
Common red flags in the jewellery trade include customers who insist on cash payments just below the ₹10 lakh threshold, purchases that do not match the customer’s known financial profile, requests to break a single large purchase into multiple smaller invoices, customers who are reluctant to provide identification and transactions involving customers from sanctioned jurisdictions.
The ₹10 lakh threshold relates specifically to the PMLA reporting framework for qualifying cash transactions. Non-cash payments such as bank transfers, UPI, RTGS, NEFT or card payments are treated differently under the reporting framework, although suspicious transactions may still require monitoring and reporting.
Screen against sanctions lists
DPMS are prohibited from dealing with sanctioned persons, banned entities or those reported to have connections with terrorism. You should regularly screen customers and suppliers against the UN Security Council consolidated list and India’s domestic sanctions/designation lists. Many DPMS also voluntarily screen against OFAC and other international sanctions lists as part of a broader risk-management framework.
Maintain records for five years
All transaction records and CDD documentation must be maintained for a minimum of five years from the date of the transaction or the termination of the business relationship, whichever is later. Records must be maintained in a manner that allows reconstruction of individual transactions and makes them available for analysis and investigation if required by authorities.
Train your staff
All employees must receive adequate training on AML/CFT compliance requirements and the internal AML programs your business has implemented. Training must cover how to identify suspicious transactions, the process for escalating concerns to the Principal Officer and the legal consequences of non-compliance. Training records should be documented and maintained.
Penalties for missing jewellers FIU-IND registration
The consequences of failing to register with FIU-IND or not meeting your PMLA obligations are serious and can affect both the business and individual officers.
Section 13 of the PMLA empowers the Director of FIU-IND to impose monetary penalties ranging from ₹10,000 to ₹100,000 for each instance of non-compliance. The Director can also issue written warnings, direct specific remedial measures or require the entity to file reports at prescribed intervals.
For systemic or repeated failures, penalties can escalate significantly. FIU-IND has demonstrated its willingness to impose multi-crore penalties on non-compliant reporting entities. Read more about independent AML reviews under FIU-IND. In January 2025, a penalty of ₹9.27 crore (INR 92.7 million) was imposed on a single entity for PMLA violations.
Beyond monetary penalties, the Designated Director and Principal Officer can be held personally liable. Serious wilful violations connected to money laundering offenses may expose individuals to criminal liability under PMLA.
Jewellers FIU-IND Registration: A Compliance Checklist
Use this checklist to assess your current compliance status.
- Registration. Have you registered with FIU-IND through the FINGate 2.0 portal? If you have ever handled a cash transaction of ₹10 lakh or more with a customer, registration is mandatory.
- Key appointments. Have you appointed a Designated Director and Principal Officer? Have you communicated their details to FIU-IND?
- KYC program. Do you have a documented KYC/CDD procedure? Are you collecting customer identification for all cash transactions of ₹50,000 and above?
- AML/CFT policy. Do you have a written, board-approved AML/CFT policy tailored to your business? Is it reviewed and updated at least annually?
- Transaction monitoring. Can you identify linked transactions that aggregate to ₹10 lakh or more? Do you have a process to flag suspicious patterns?
- Reporting. Are you filing CTRs within 15 days of month-end? Do you have a process to file STRs within seven working days?
- Sanctions screening. Do you screen customers against UN, MHA and other sanctions lists before completing transactions?
- Record-keeping. Are transaction records and CDD files maintained for at least five years? Can you reconstruct individual transactions if asked?
- Training. Have all relevant staff received AML/CFT training? Are training records documented?
- Independent review. Has your AML/CFT program been independently reviewed or audited? While not explicitly mandated for DPMS today, this is a best practice that may become an emerging supervisory expectation.
Frequently Asked Questions
Do all jewellers need FIU-IND registration?
No. Jewellers FIU-IND registration is generally required where a business engages in qualifying cash transactions of ₹10 lakh or above with a customer, whether in a single transaction or linked transactions. If your business exclusively handles transactions below this threshold and never accepts cash at or above ₹10 lakh from any single customer, registration may not be required. Businesses should still consider customer due diligence measures for higher-value cash transactions, even where FIU-IND registration may not yet be triggered.
What counts as “linked transactions”?
Linked transactions are multiple cash payments from the same customer that, taken together, equal or exceed ₹10 lakh. If a customer makes three purchases of ₹4 lakh each over the course of a month, these are aggregated. The transactions do not need to occur on the same day to be considered linked.
Can jewellers accept cash above ₹2 lakh under the Income Tax Act?
Section 269ST of the Income Tax Act prohibits any person from receiving ₹2 lakh or more in cash in a single transaction, from a single person in a day or against a single event or occasion. Violation attracts a penalty equal to the amount received. This is separate from PMLA obligations but applies concurrently. A jeweller receiving ₹2 lakh or more in cash faces Income Tax Act penalties and at ₹10 lakh, PMLA obligations are additionally triggered.
Do UPI, RTGS, NEFT or card payments trigger FIU-IND registration?
The ₹10 lakh threshold under the PMLA framework specifically relates to qualifying cash transactions by dealers in precious metals and stones. Non-cash payments such as UPI, RTGS, NEFT, bank transfers or card payments are treated differently under the reporting framework. However, suspicious transactions, whether cash or non-cash, may still require monitoring and reporting under applicable AML/CFT obligations.
What is the FINGate 2.0 portal?
FINGate 2.0 is the online portal operated by FIU-IND for entity registration and report filing. All DPMS must register and file CTRs, STRs and other reports through this platform. Access requires a valid digital signature certificate.
How often must CTRs be filed?
CTRs must be filed monthly, within 15 days of the end of the month in which the reportable cash transaction occurred.
What qualifications does the Principal Officer need?
FIU-IND guidelines require the Principal Officer to be a senior management-level individual with adequate knowledge of AML/CFT requirements. There is no specific certification requirement, but the person must be capable of fulfilling the compliance and reporting responsibilities under PMLA.
Key takeaways
The ₹10 lakh cash transaction rule is not new, but enforcement is intensifying. The FATF’s 2024 evaluation put India’s precious metals and stones sector under a global spotlight. FIU-IND is expanding its supervisory reach and the compliance bar for jewellers is rising.
If your business handles cash transactions at or above the threshold, register with FIU-IND, build your AML/CFT program and train your team. The cost of jewellers FIU-IND registration and compliance is a fraction of the cost of a penalty or prosecution.
Compliance7 helps jewellers and other DPMS build practical, audit-ready AML/CFT programs. Our CAMS-certified team understands the unique challenges of the precious metals and stones sector. Book a free consultation to discuss your compliance needs.
This article is for informational purposes only and does not constitute legal or regulatory advice. Consult a qualified compliance professional for guidance specific to your business. Regulatory expectations may vary depending on the nature, scale and risk profile of the business and businesses should consider obtaining professional advice tailored to their specific operations.
