- Date : 05/06/2023
- Read: 3 mins
The new rules for post office schemes in India require income proof for investments over Rs. 10 lakhs to prevent money laundering.
- The Indian government has introduced new rules for post office schemes, requiring income proof for investments exceeding Rs 10 lakh.
- The circular categorises customers based on risk perception and mandates KYC documentation for all categories.
- High-risk depositors must provide additional proof of source of funds, such as income tax returns or bank statements.
In a bid to enhance transparency and combat money laundering, the Indian government has introduced new post office scheme rules for small savings. These rules mandate income proof for investments exceeding Rs. 10 lakhs and reinforce the KYC process for depositing with India Post. Discover more about the income proof requirements for small savings schemes in this comprehensive update.
The new circular issued by the Department of Posts and its significance
The Department of Posts has issued a circular requiring investors who put in over Rs. 10 lakhs in post office schemes to provide income proof to comply with revised AML/KYC/CFT norms.
Categorising customers with India Post accounts: Understanding the segmentation approach
The circular categorises customers based on risk perception as follows:
- Low Risk: Customers are labelled as low risk if their account activity, savings certificate purchases, and credit transactions for maturity/prematurity values are below Rs. 50,000, with the total balance not exceeding Rs. 50,000.
- Medium Risk: Customers who open accounts, purchase certificates, or apply for maturity/prematurity value of savings instruments with amounts ranging from Rs. 50,000 to Rs. 10 lakhs are categorised as medium risk.
- High Risk: Customers who open an account, buy certificates, or redeem savings instruments worth more than Rs. 10 lakhs are categorised as high risk.
Documentation required under KYC rules
Investors from all categories must submit the following:
- Two photos
- Self-attested copies of Aadhaar and PAN Card
- Address proof
KYC must be updated every 2, 5, and 7 years for high, medium, and low-risk customers, respectively.
Additional documents required for high-risk customers
High-risk customers must provide proof of source of funds, such as income tax returns, bank statements, or succession certificates. KYC norms and income proof requirements apply to guardians of minor depositors.
Also Read: Budget 2023 brings good news for small savings scheme investors
What transactions should be reported by India Post to the authorities?
The following transactions should be reported by India Post:
- Cash transactions exceeding Rs. 10 lakhs.
- Multiple cash transactions totalling over Rs. 10 lakhs in a single month.
- An account where counterfeit currency notes are used or where there is forgery of valuable securities or documents.
- Any transaction attempt involving counterfeit currency notes, forged security, or document.
- Any transaction that is deemed suspicious, regardless of the amount involved, including but not limited to deposits, withdrawals, account transfers, solvency certificates, and indemnity certificates.
Also Read: Why small savings schemes are your secret to financial success
In conclusion, the implementation of new rules in post office schemes will fortify the system against criminal activities, ensuring enhanced security and safeguarding the interests of depositors. By demanding comprehensive financial information, these measures aim to create a safer and more resilient environment for all stakeholders.
Related: Will investing in Post Office FDs get you better returns?
