Prevention-of-Money-Laundering-Act-2002

Prevention of Money Laundering Act

Prevention of Money Laundering Act 2002

The Prevention of Money Laundering Act 2002 was enacted to fight against the criminal offence of legalizing the income/profits from an illegal source. The Act enables the Government or the public authority to confiscate (seize with authority) the property earned from the illegally gained proceeds.

Objectives of the Act

  • To control and prevent money laundering
  • To confiscate the property obtained from the laundered money; and
  • To deal with any other issue linked with money laundering in India.

Money Laundering

Money Laundering involves activities undertaken to conceal property or transfer/convert the property disguising the nature of the proceeds and claim it as unattained property. The acquisition, possession or use of such property is considered an offence. Whosoever (any individual, group or an association) directly or indirectly attempts to indulge or intentionally assist in money laundering or knowingly is a party or involved in any activity associated with proceeds of crime would be accountable of the offence of money laundering.

Punishment Imposable under the Act 

Under the Prevention of Money Laundering Act, whoever commits the crime of money-laundering are liable to be punished with imprisonment for a period of not less than three years but may continue for seven years and a penalty of Rs.5 lakhs. The period of imprisonment may also extend to 10 years for certain crimes. As per section 45 of the PMLA, money laundering is a non-bailable offence, which means that an arrested person is not entitled to bail as a matter of right. Further under PMLA, an arrest can be made without a warrant, according to certain expert legal opinions. Also, if convicted under an offence as per the Act, the convicted person may be debarred from contesting in elections for a period of eight years commencing from the date of the conviction.

PMLA and Income Tax

As per Section 271(C) of Income Tax Act, concealing income and not providing the legitimate details of the income is an offence with a penalty of 100% to 300% of the amount of evaded income tax.

Prevention of Money Laundering Act (PMLA)

The Prevention of Money Laundering Act, 2002 is reproduced below for reference:

Prevention of Money Laundering Act 2002

Post by Marlin Priya

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