Jewellery and gold in all its form purchased out of disclosed income or legally inherited from ancestors is not chargeable to tax under the amended I-T law, said Finance Ministry on Thursday. Giving a major relief to the people who were anticipating that jewellery would be covered under the amended law after demonetisation of high value currency notes, the Central Board of Direct Taxes (CBDT) announced that the Gold purchased from various sources including disclosed income, income exempted from tax, agricultural income or reasonable household savings not to be taxed. Besides, the ancestral Gold jewelleries or those who have been acquired from explained sources are also not falling under the ambit of tax, announced the ministry.
“The jewellery or gold purchased out of disclosed income or out of exempted income like agricultural income or out of reasonable household savings or legally inherited which has been acquired out of explained sources is neither chargeable to tax under the existing provisions nor under the proposed amended provisions,” the CBDT said.
Prime Minister Narendra Modi on November 8 announced the ban on Rs 500 and Rs 1,000 currency notes to combat corruption and black money from the Indian economy. As India is the world’s second-biggest gold buyer, and it is estimated that one-third of its annual demand of up to 1,000 tonnes is paid for in black money – untaxed funds held in secret by citizens in cash that don’t appear in any official accounts, the ministry were reportedly monitoring gold deposits of people after the ambitious demonetisation step. However, the ministry clearified that Gold purchased out of purchased out of disclosed income or exempted income or reasonable household savings will not be chargeable to tax.
The ministry further notified that that I-T department would not seize gold jewellery to extent of 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family besides the above relaxation. Also, legitimate holding of jewellery up to any extent is fully protected, said CBDT.
Earlier, the government rooted out anticipation that it might be imposing some kind of restrictions on gold holding by individuals that was hovering around after the reports that many people had converted their black money into gold after the move.