Insertion of new section 12AA

In force As on 07 Oct 2026

Ministry Finance Cited by 1 provision

Section 195 of the Finance Act, 2019 (No. 2) deals with insertion of new section 12AA. Insertion of new section 12AA 195. After section 12A of the principal Act, the following section shall be inserted, namely:-- '12AA.

Insertion of new section 12AA
195. After section 12A of the principal Act, the following section shall be inserted, namely:--
'12AA. Enhanced due diligence.— (1) Every reporting entity shall, prior to the commencement of each specified transaction,—
(a) vertify the identity of the clients undertaking such specified transaction by authentication under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016) in such manner and subject to such conditions, as may be prescribed:
Provided that where verification requires authentication of a person who is not entitled to obtain an Aadhaar number under the provisions of the said Act, verification to authenticate the identity of the client undertaking such specified transaction shall be carried out by such other process or mode, as may be prescribed;
(b) take additional steps to examine the ownership and financial position, including sources of funds of the client, in such manner as may be prescribed;
(c) take additional steps as may be prescribed to record the purpose behind conducting the specified transaction and the intended nature of the relationship between the transaction parties.
(2) Where the client fails to fulfil the conditions laid down under sub-section (1), the reporting entity shall not allow the specified transaction to be carried out.
(3) Where any specified transaction or series of specified transactions undertaken by a client is considered suspicious or likely to involve proceeds of crime, the reporting entity shall increase the future monitoring of the business relationship with the client, including greater scrutiny or transactions in such manner as may be prescribed.
(4) The information obtained while applying the enhanced due diligence measures under sub-section (1) shall be maintained for a period of five years from the date of transaction between a client and the reporting entity.
Explanation.—For the purposes of this section, "specified transaction" means—
(a) any withdrawal or deposit in cash, exceeding such amount;
(b) any transaction in foreign exchange, exceeding such amount;
(c) any transaction in any high value imports or remittances;
(d) such other transaction or class of transactions, in the interest of revenue or where there is a high risk or money-laundering or terrorist financing,
as may be prescribed.'.
Section 195, The Finance Act, 2019 (No. 2).

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

Referred to by 1

s. 47 Amendment of section 195

Questions about Section 195

What does Section 195 of the Finance Act, 2019 (No. 2) deal with?

Section 195 of the Finance Act, 2019 (No. 2) is headed "Insertion of new section 12AA". Insertion of new section 12AA 195. After section 12A of the principal Act, the following section shall be inserted, namely:-- '12AA.

How do I find court cases under Section 195 of the Finance Act, 2019 (No. 2)?

In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Finance Act, 2019 (No. 2) 195, section 195 Finance Act, 2019 (No. 2), section 195 of the Finance Act, 2019 (No. 2). Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.

What should I read with Section 195 of the Finance Act, 2019 (No. 2), and has it changed?

1 other provision in this corpus refers back to it.

When was the Finance Act, 2019 (No. 2) enacted?

Finance Act, 2019 (No. 2) was enacted in 2019. India Code records no commencement date for it. It is in force as at the date shown on this page.

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(a)		vertify the identity of the clients undertaking such specified transaction by authentication under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016) in such manner and subject to such conditions, as may be prescribed:
		Provided that where verification requires authentication of a person who is not entitled to obtain an Aadhaar number under the provisions of the said Act, verification to authenticate the identity of the client undertaking such specified transaction shall be carried out by such other process or mode, as may be prescribed;
(b)		take additional steps to examine the ownership and financial position, including sources of funds of the client, in such manner as may be prescribed;
(c)		take additional steps as may be prescribed to record the purpose behind conducting the specified transaction and the intended nature of the relationship between the transaction parties.

(a)		any withdrawal or deposit in cash, exceeding such amount;
(b)		any transaction in foreign exchange, exceeding such amount;
(c)		any transaction in any high value imports or remittances;
(d)		such other transaction or class of transactions, in the interest of revenue or where there is a high risk or money-laundering or terrorist financing,