No tax on gold bought with legal income: government
The govt says amendments to income tax laws do not seek to tax inherited gold, jewellery and items that are purchased through disclosed income
New Delhi: Moving to allay fears of a tax on gold holdings, the finance ministry clarified on Thursday that gold jewellery purchased with legal income will not be taxable.
Fears of a tax on gold jewellery surfaced after the government introduced the Taxation Laws (Second Amendment) Bill, 2016 that sought to levy higher taxes and penalty on undisclosed assets and cash deposits. This was necessitated by the government’s decision to withdraw Rs500 and Rs1,000 banknotes, forcing people to deposit their cash holdings in bank accounts.
“It is clarified that the jewellery/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,” a finance ministry statement on Thursday said, adding that the bill has not introduced any new provision for levying tax on jewellery.
The statement reiterated the existing rules that during search operations, there will be no seizure of gold jewellery to the extent of 500g per married woman, 250g per unmarried woman and 100g per male member of the family.
“Further, legitimate holding of jewellery up to any extent is fully protected,” it added.
The taxation laws amendment bill has been passed by the Lok Sabha and sent to the Rajya Sabha for suggestions. The bill proposes to tax illegal unexplained cash and assets at a tax and penalty exceeding 82% if the declarant does not come forward and declare the illegal income under the new proposed income disclosure scheme.
Sixteen opposition parties led by the Congress met President Pranab Mukherjee on Thursday to discuss the way in which the Taxation Laws (2nd Amendment) Bill was cleared by the Lok Sabha by voice vote and without discussion on Tuesday.
“We (the opposition delegation) gave the President a memorandum. The voice of the opposition was stifled in Parliament,” said Rahul Gandhi, Congress Vice-president.