Govt Mandates Income Proof For Post Office Investments Over Rs 10 Lakhs

The Central Government has made proof of funds source mandatory for all Post office investment schemes, over Rs 10 lakh, according to a media report on Saturday.

The Center’s strict, Know Your Customer (KYC) and Prevention of Money Laundering Act (PMLA) compliance rules are to prevent Post office scheme's misuse from terrorist financing and money laundering activities.

 According to the Department of Posts circular dated 25 May 2023, all its officials are directed to collect income proofs from certain categories of small savings schemes’ investors.

The circular came in following the revision of norms like KYC, Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT), the department stated. 

As per the circular, customers are divided into three categories including high risk, low risk and medium risk. High-risk category investors are required to provide proof of money being invested apart from the commonly followed KYC norms.

The accounts of Politically Exposed Persons (PEPs) residing outside India shall fall under the high-risk investment category as PEPs are individuals entrusted with prominent public functions by a foreign country, including the heads of states, governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations and other important political party officials.

As per the circular, the customer is liable to submit a document verifying the source of the investment receipt which stands as a proof and can be any document such as bank or post office account statement, last financial year’s income tax filing, sale deed, gift deed, will, letter of administration, succession certificate and any other document reflecting the income or source of fund.

Apart from proof of money, all categories of investors irrespective of their risk categories are required to produce the address proof from any one Aadhaar or PAN card. In case these two documents do not mention the present address any officially valid document such as a passport, driving license, voter’s ID card, or utility bills not older than two months can be submitted for address verification, the circular added.

The official statement further stated all the documents must be self-attested by the investor. In the case of a joint account, ID and address proof of all joint depositors will be mandatory. For the basic savings accounts, the document proving the depositor ‘s beneficiary under any government scheme stands valid.