Section 24 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 24 sets two presumptions in any proceeding relating to proceeds of crime under the Act. For a person charged with the offence of money-laundering under section 3, the Authority or Court "shall, unless the contrary is proved, presume" that the proceeds of crime are involved in money-laundering. For any other person, the Authority or Court "may presume" the same.
This article reads the section as printed in the consolidated text of the Act consulted (amendments shown up to 1 August 2019). Later amendments, rules and notifications should be checked; nothing after that date is stated here. No statement is made on how any court has treated the section.
In any proceeding relating to proceeds of crime under the Act: (a) for a person charged with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that the proceeds of crime are involved in money-laundering; (b) for any other person, the Authority or Court may presume the same. The difference between "shall" and "may" is the whole structure of the section.
The text
Section 24 was substituted for the earlier section 24 by Act 2 of 2013, section 19 (w.e.f. 15-2-2013), as the footnote prints. It reads:
"In any proceeding relating to proceeds of crime under this Act,— (a) in the case of a person charged with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and (b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-laundering."
| Feature | Clause (a) | Clause (b) |
|---|---|---|
| Person concerned | A person charged with the offence of money-laundering under section 3 | Any other person |
| Who presumes | The Authority or Court | The Authority or Court |
| Mood | "shall ... presume" | "may presume" |
| What is presumed | Such proceeds of crime are involved in money-laundering | Such proceeds of crime are involved in money-laundering |
| Condition on the presumption | "unless the contrary is proved" | None stated |
The presumption is the same in both clauses: that "such proceeds of crime are involved in money-laundering". What differs is whether the presumption is compulsory, and whether the text says it yields to proof of the contrary.
If you are a person charged under the Act, or an entity whose property is the subject of a proceeding, and you want to understand which clause is likely to be in play, legal dispute resolution support can help you read your position against the text.
Reading the opening words
"In any proceeding relating to proceeds of crime under this Act" is a wide opening. It is not confined to the trial of an offence. It speaks of "any proceeding relating to proceeds of crime under this Act". The proceedings under the Act that deal with proceeds of crime include provisional attachment in section 5, adjudication in section 8 and the trial of the offence in section 3 read with section 4. The section does not itself list them, and this article does not say which proceeding is covered in a particular case beyond the words of the section.
"Authority or Court" is used without definition in the section itself. The Adjudicating Authority is defined in section 2(1)(a), and the Special Court in section 2(1)(z); see our article on section 1 and the authority terms. Other authorities appear in Chapter VIII. The text of section 24 does not say which of these is meant at which stage.
Clause (a): a person charged
Clause (a) applies "in the case of a person charged with the offence of money-laundering under section 3". Two features follow.
- It depends on a charge. The person must be "charged with the offence of money-laundering under section 3". The text does not describe at what stage a person is "charged", and this article does not add any description.
- It is mandatory but rebuttable. The Authority or Court "shall" presume, "unless the contrary is proved". The presumption is stated to give way if the contrary is proved. The text does not say who proves it or to what standard.
Clause (b): any other person
Clause (b) applies "in the case of any other person" and says the Authority or Court "may presume". There is no "unless the contrary is proved" in clause (b), and the presumption is permissive. The text does not say when the Authority or Court should or should not exercise the option, and this article gives no rule.
"Any other person" is not defined. It follows from the wording that it takes in persons who are not charged under section 3. The person whose property is the subject of a notice under section 8, but who is not charged with the offence, is an example of a person who is not described in clause (a); but the section does not name such persons, and the reading is only from the words.
What section 24 does not say
- It does not describe the proof needed to show "the contrary".
- It does not say that the presumption applies to the scheduled offence itself; it speaks of proceeds of crime being "involved in money-laundering".
- It does not deal with bail. Conditions for bail are in section 45, explained in our article on section 45.
- It does not repeat the presumptions in sections 22 and 23; those are about records, property and inter-connected transactions, and are explained in our article on sections 22 and 23.
| Provision | Subject of the presumption |
|---|---|
| Section 22(1) | Records or property found, produced, seized or frozen: ownership, truth of contents, handwriting |
| Section 22(2) | Records received from outside India: handwriting and execution |
| Section 23 | Remaining inter-connected transactions form part of those proved to be involved |
| Section 24 | Proceeds of crime are involved in money-laundering |
An illustration
These names are invented. Mr Vijay Khanna is charged with the offence of money-laundering under section 3, and in the proceeding the question arises whether certain funds are proceeds of crime involved in money-laundering. Under clause (a), the Authority or Court shall presume that they are, unless the contrary is proved. Separately, in a proceeding relating to proceeds of crime, his sister Ms Rekha Khanna, who is not charged, is the holder of an account in which some of the funds were deposited. Under clause (b), the Authority or Court may presume that the proceeds are involved in money-laundering. The text leaves it to the Authority or Court to decide whether to do so.
The illustration shows how the clauses are read from the words. It does not say how any proceeding will end.
Reading the section with the rest of the Act
Section 24 sits at the end of Chapter V, after the powers of survey, search, arrest and retention, and after the presumptions in sections 22 and 23. A reader should read it with the definitions of "proceeds of crime" and "scheduled offence" in section 2(1); see our article on the key definitions. Our general guide on definitions of money laundering and proceeds of crime gives a wider overview.
Need help in a proceeding relating to proceeds of crime?
Which clause of section 24 applies depends on whether a person is charged under section 3. We can read the section against your documents and the stage of the proceeding with you through legal dispute resolution.
Key takeaways
- Section 24 applies in any proceeding relating to proceeds of crime under the Act.
- For a person charged with the offence of money-laundering under section 3, the Authority or Court shall presume, unless the contrary is proved, that the proceeds of crime are involved in money-laundering.
- For any other person, the Authority or Court may presume the same.
- The text does not say who proves the contrary or to what standard.
- The section was substituted by Act 2 of 2013 (w.e.f. 15-2-2013).
- It is separate from the presumptions in sections 22 and 23.
Read next
- Sections 22 and 23: presumptions as to records, property and inter-connected transactions
- Section 3: offence of money-laundering
- Section 8: adjudication, confirmation of attachment and confiscation
- Key Definitions Under PMLA: Money Laundering, Proceeds of Crime
Disclaimer: Based on the consolidated text of the Prevention of Money-laundering Act, 2002 published by the Enforcement Directorate, showing amendments up to Act 23 of 2019 (1 August 2019), and on the Department of Revenue consolidated copy of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 listing amendments up to 19 July 2024, as consulted on 2 October 2026. Later amendments, notifications, other rules and regulator directions should be checked. This article is general information, not legal advice; check the official text before acting.