India Drops Tax on Gold Deposits
January 25, 2016 Taxation in India
NEW DELHI – The government of India is hoping to make use of the vast reserves of gold held by consumers in the country, and is now offering tax benefits to taxpayers willing to deposit their gold and jewellery in the Gold Monetization Scheme.
Late last week the government of India announced that the regulations of the national Gold Monetization Scheme will be amended to make it more attractive for consumers, and also that the gains made by taxpayers from the scheme will be exempt from taxation.
The Gold Monetization Scheme allows the public to deposit any gold jewellery, bars, or coins for a pre-set period of time in exchange for interest redeemable in gold or money.
The interest rate can be repaid either as more gold, or as money, with the amount to be paid back to be set based on the prevailing value of gold at the time.
If consumers chose to withdraw their deposits as money, then they will not face income taxes on their gains.
The scheme is intended to encourage taxpayers to make use of gold which is currently being stored, and not worn, or otherwise utilized.
The government believes that by pushing for a greater utilization of gold already in India, the country can reduce its reliance on gold imports.
The gold deposited as part of the scheme is melted down and formed into bullion.
Since the Gold Monetization Scheme was launched in November 2015, approximately 900.087 kilograms of gold has already been deposited.
Photo By: Priyambada Nath