Proceeds of crime
Also called: Tainted property
Property derived or obtained, directly or indirectly, by any person as a result of criminal activity, or the value of such property (Section 111(c) of the BNSS).
Explained
Section 111(c) of the BNSS, in Chapter VIII on reciprocal arrangements and the attachment and forfeiture of property, defines proceeds of crime as any property derived or obtained directly or indirectly, by any person as a result of criminal activity (including crime involving currency transfers) or the value of any such property. The same definition stood earlier in Section 105A(c) of the CrPC. Property is defined widely in Section 111(d) to include corporeal and incorporeal, movable and immovable assets, title deeds, and property obtained through proceeds of crime.
Section 107 of the BNSS is new. A police officer making an investigation who has reason to believe that property was derived from a criminal activity may, with the approval of the Superintendent of Police or Commissioner of Police, apply to the Court or Magistrate for its attachment. The Court issues a show cause notice giving fourteen days, may proceed ex parte if the person does not appear, and may order interim attachment without notice where notice would defeat the object. If the property is found to be proceeds of crime, Section 107(6) requires the Court to direct the District Magistrate to distribute it rateably among the persons affected by the crime, which Section 107(7) requires to be done within sixty days.
The PMLA uses a narrower, linked definition. Under Section 2(1)(u) of that Act, proceeds of crime is property derived from criminal activity relating to a scheduled offence, including equivalent property in India or abroad when the property is held outside the country. Money laundering under Section 3 is any process or activity connected with such proceeds, including concealment, possession, acquisition or use and projecting it as untainted. Because the definition depends on the scheduled offence, the Supreme Court held in Vijay Madanlal Choudhary (2022) that there can be no offence of money laundering once the person is finally discharged or acquitted of the scheduled offence, or the case is quashed.
Examiners ask who approves the application under Section 107, the fourteen day notice period, and to whom the proceeds are distributed.
What the law says
(c) “proceeds of crime” means any property derived or obtained directly or indirectly, by any person as a result of criminal activity (including crime involving currency transfers) or the value of any such property;
Clause (c) defines proceeds of crime; clause (d) defines property
Earlier law: CRPC 105A. Definitions.
(2) If the Court or the Magistrate has reasons to believe, whether before or after taking evidence, that all or any of such properties are proceeds of crime, the Court or the Magistrate may issue a notice upon such person calling upon him to show cause within a period of fourteen days as to why an order of attachment shall not be made.
(3) Where the notice issued to any person under sub-section (2) specifies any property as being held by any other person on behalf of such person, a copy of the notice shall also be served upon such other person.
(4) The Court or the Magistrate may, after considering the explanation, if any, to the show-cause notice issued under sub-section (2) and the material fact available before such Court or Magistrate and after giving a reasonable opportunity of being heard to such person or persons, may pass an order of attachment, in respect of those properties which are found to be the proceeds of crime:
Attachment, forfeiture and distribution of proceeds of crime
Earlier law: CRPC New Section
(u) “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad];
Clause (u) of sub-section (1): PMLA definition tied to scheduled offences
Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the [proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering.
[Explanation.—For the removal of doubts, it is hereby clarified that,—
(i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:—
Offence of money laundering, defined by reference to proceeds of crime
Earlier law: Section 105A, CrPC
For the exam
- Definition: Section 111(c) BNSS, earlier Section 105A(c) CrPC; includes the value of the property.
- Section 107 BNSS: police apply with SP or Commissioner approval; show cause within 14 days.
- Proceeds are distributed rateably to victims through the District Magistrate within 60 days.
- PMLA Section 2(1)(u): proceeds must relate to a scheduled offence.
- No PMLA offence survives if the accused is discharged or acquitted of the scheduled offence.
75 questions in the Law Maker question bank use this term. Practise Bharatiya Nagarik Suraksha Sanhita questions
Judgments
Related terms
- Money-launderingBeing involved in, or knowingly assisting, any process or activity connected with proceeds of crime, such as concealment, possession, acquisition, use, or projecting it as untainted. Section 3, PMLA.
- Organised crime syndicateA group of two or more persons who, acting singly or jointly, as a syndicate or gang indulge in any continuing unlawful activity (Section 111 of the BNS).
- InvestigationAll proceedings under the BNSS for the collection of evidence by a police officer, or by a person other than a Magistrate authorised by a Magistrate.
- Movable propertyUnder Section 2(21) of the BNS, property of every description except land and things attached to the earth or permanently fastened to anything attached to the earth. Other Acts frame it differently.
- Immovable propertyLand, benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth. Defined inclusively in Section 3(26) of the General Clauses Act, 1897.
Further reading
Checked 6 November 2026. Statutory text is quoted from the Bare Acts library, taken from India Code. See the full glossary.