Prevention of Money-Laundering Act, 2002
An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto.
TaxByKK · Laws by Sector · taxbykk.comIndex as on 27th July, 2025
Index of provisions · 10 chapters, 81 sections
Chapter I Preliminary2 sections
Chapter II Offence of Money-laundering2 sections
Chapter III Attachment, Adjudication and Confiscation7 sections
- 5Attachment of property involved in money-laundering
- 6Adjudicating Authorities, composition, powers, etc
- 7Staff of Adjudicating Authorities
- 8Adjudication
- 9Vesting of property in Central Government
- 10Management of properties confiscated under this Chapter
- 11Power regarding summons, production of documents and evidence, etc
Chapter IV Obligations of Banking Companies, Financial Institutions and Intermediaries7 sections
- 11AVerification of identity by reporting entity
- 12Reporting entity to maintain records
- 12AAccess to information
- 12AAEnhanced due diligence
- 13Powers of Director to impose fine
- 14No civil or criminal proceedings against reporting entity, its directors and employees in certain cases
- 15Procedure and manner of furnishing information by reporting entities
Chapter V Summons, Searches and Seizures, Etc9 sections
Chapter VI Appellate Tribunal18 sections
- 25Appellate Tribunal
- 26Appeal to Appellate Tribunal
- 27[Omitted]
- 28[Omitted]
- 29[Omitted]
- 30[Omitted]
- 31[Omitted]
- 32[Omitted]
- 33[Omitted]
- 34[Omitted]
- 35Procedure and powers of Appellate Tribunal
- 36Distribution of business amongst Benches
- 37Power of Chairperson to transfer cases
- 38Decision to be by majority
- 39Right of appellant to take assistance of authorised representative and of Government to appoint presenting officers
- 40Members, etc., to be public servants
- 41Civil court not to have jurisdiction
- 42Appeal to High Court
Chapter VII Special Courts5 sections
Chapter VIII Authorities7 sections
- 48Authorities under Act
- 49Appointment and powers of authorities and other officers
- 50Powers of authorities regarding summons, production of documents and to give evidence, etc
- 51Jurisdiction of authorities
- 52Power of Central Government to issue directions, etc
- 53Empowerment of certain officers
- 54Certain officers to assist in inquiry etc
Chapter IX Reciprocal Arrangement for Assistance in Certain Matters and Procedure for Attachment and Confiscation of Property9 sections
- 55Definitions
- 56Agreements with foreign countries
- 57Letter of request to a contracting State in certain cases
- 58Assistance to a contracting State in certain cases
- 58ASpecial Court to release the property
- 58BLetter of request of a contracting State or authority for confiscation or release the property
- 59Reciprocal arrangements for processes and assistance for transfer of accused persons
- 60Attachment, seizure and confiscation, etc., of property in a contracting State or India
- 61Procedure in respect of letter of request
Chapter X Miscellaneous15 sections
- 62Punishment for vexatious search
- 63Punishment for false information or failure to give information, etc
- 64Cognizance of offences
- 65Code of Criminal Procedure, 1973 to apply
- 66Disclosure of information
- 67Bar of suits in civil courts
- 68Notice, etc., not to be invalid on certain grounds
- 69Recovery of fine or penalty
- 70Offences by companies
- 71Act to have overriding effect
- 72Continuation of proceedings in the event of death or insolvency
- 72AInter-ministerial Co-ordination Committee
- 73Power to make rules
- 74Rules to be laid before Parliament
- 75Power to remove difficulties
Schedules
- The Schedule
About this Act
The Prevention of Money-Laundering Act, 2002 (PMLA) makes money-laundering a criminal offence and provides for attachment and confiscation of property derived from, or involved in, money-laundering. The offence is defined in section 3 and punished under section 4.
The Directorate of Enforcement investigates under the Act, with powers of survey, search, seizure and arrest in Chapter V. Provisional attachment is confirmed by an Adjudicating Authority (Chapter III), appeals lie to an Appellate Tribunal (Chapter VI), and offences are tried by Special Courts (Chapter VII).
Chapter IV places identity verification, record-keeping and reporting obligations on reporting entities such as banking companies, financial institutions and intermediaries. Chapter IX deals with cross-border assistance through reciprocal arrangements.
Who it applies to
- Any person involved in money-laundering or in possession of proceeds of crime
- Reporting entities: banking companies, financial institutions, intermediaries and other notified persons
- Directors and employees of reporting entities, for compliance with Chapter IV
- Companies and persons in charge of them, under section 70
- Persons whose property is attached or confiscated
Good to know
- Key chapters
- Chapter II (offence and punishment), Chapter III (attachment and confiscation), Chapter IV (reporting entity obligations) and Chapter V (search, seizure and arrest).
- Amended by
- Amending Acts of 2005, 2009 and 2012, several Finance Acts between 2015 and 2019, and the Jan Vishwas (Amendment of Provisions) Act, 2023, among others.
Frequently asked questions
Which section defines the offence of money-laundering?
Section 3; punishment is under section 4.
Which section deals with provisional attachment of property?
Section 5.
Where are KYC and record-keeping duties of reporting entities?
Section 11A (verification of identity) and section 12 (maintenance of records); enhanced due diligence is in section 12AA.
Which section gives the power to arrest?
Section 19.
Are PMLA offences bailable?
No. Section 45 makes offences under the Act cognizable and non-bailable.