NEW DELHI: It’s perhaps time to pull out your gold and jewellery which may have been lying idle in cupboards and bank lockers for years. Besides gold, jewellery of all kinds will fetch you returns if you participate in the government’s Gold Monetisation Scheme, details of which will be announced soon.
To make the scheme palatable it is unlikely that the taxman will ask you to pay wealth tax on jewellery which you or your family may have owned for generations, according to finance ministry officials involved in preparing the scheme.
The finance ministry is giving the final touches to the blueprint of an ambitious plan intended to persuade Indians to part with at least a fraction of their stupendous gold hoard.
Gold Imports Worth $34.3 billion
Indians are among the world’s largest consumers of gold, importing at least $34.3 billion worth of the precious metal for the fiscal year ended March 31, 2015. “The broad contours of the plan are ready. It would be made public in a week,” a finance ministry official told ET. The government is keen to make the scheme attractive and a draft seeking comments from the public will be released soon.
Under the terms of the proposed scheme, the deposited precious metals will be melted and the gold in the jewellery would be credited in the name of the depositor.
The depositor would earn interest on the value of gold on the day of deposit. The investor would be paid cash equal to the value of the gold on that day if he seeks to withdraw from the scheme or it matures.
The scheme will essentially allow a depositor to earn an income from his gold holdings while his basic investment is protected. It is expected to help organisations such as temple trusts and even companies to unlock their gold holdings while the economy will benefit from lower imports if stored gold comes into circulation.
Gold imports were up 22% in FY15 to $34.3 billion as the government eased quantitative restrictions on gold imports imposed in the wake of the currency of late 2013. The government is unlikely to ask people depositing family jewellery to show past wealth tax payment.
The 2015 budget has scrapped wealth tax, which is levied on assets such as gold holdings, tax authorities can always open assessment for the past six years.
However, the depositor will have to follow Know Your Customer (KYC) norms and will have to furnish their permanent account number (PAN). Finance Minister Arun Jaitley had announced the gold monetisation scheme in the Budget.