The government is likely to consider and approve Gold Monetisation Scheme in the next few weeks, which proposes to offer tax-free interest to individual on depositing the yellow metal with banks.
“Cabinet note on this (Gold Monetisation Scheme) has been circulated. It will take couple of weeks before approval comes,” sources said.
Various proposals including interest rate are at the discussion stage, sources said.
The draft gold monetisation scheme announced in May proposed to provide incentives to the banks, while individuals and institutions can deposit as low as 30 gm of gold.
It also proposed that the interest earned on it would be exempt from income tax as well as capital gains tax.
The stock of gold in India that is held by people that is ‘neither traded nor monetised’ is estimated to be over 20,000 tonnes, which would be worth about Rs 60 lakh crore at the current market price.
India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tonnes each year.
As per the draft guidelines, a person or institution holding surplus gold can get it valued from BIS-approved hallmarking centres, open a Gold Savings Account in banks for a minimum period of one year and earn interest in either cash or gold units.
The scheme, which is proposed to be initially introduced only in select cities, was announced in the Budget this year by Finance Minister Arun Jaitley.
“The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account.
Banks/other dealers would also be able to monetise this gold,” Jaitley had said.
The proposed scheme is aimed at monetising idle gold held by households and institutions, provide a fillip to the gems and jewellery sector and reduce reliance on import of the metal over time to meet the domestic demand.
Under the scheme, the bank interest to the customers will be payable after 30/60 days of opening of the Gold Savings Account.
Besides, sources said that nod on issuance of Sovereign Gold Bond could take a while.
The Finance ministry last month came out with a discussion paper on the sovereign gold bond scheme. It had suggested that the scheme be linked to the government borrowing programme.