You must have heard the famous saying “There's Something About Gold That Brings Out The Avarice In Men”. Parting with your gold is like parting with a piece of your heart. Your gold lies idle, hidden in your cupboard locker or a bank locker for years. The Government plans to bring all this hidden gold back into the economy in a bold scheme called gold monetization.
"The desire for gold is the most universal and deeply rooted commercial instinct of the human race."
- Gerald Loeb
Tired of leaving your gold lying idle in the bank locker. Want to earn interest on it. Now’s your chance to use the Gold Monetization Scheme to earn interest on jewelry.
You walk into any of the 350 gold testing centers in India and get your gold jewelry tested.
You have to get your gold jewelry tested at any of the 350 hallmarking centers in India which have the Bureau of Indian Standards (BIS) certification. These are gold purity testing centers. You come to know the approximate value of the purity of gold in your gold jewelry.
You change your mind on going for the gold monetization scheme. You simply walk out with your gold.
Let’s say you are happy with the assessment made by the purity testing center and want to continue with the gold monetization scheme.
You will have to fill up a KYC form (Takes about 45 minutes) and give your consent so that your gold can be melted. Your gold is then melted and any studs or precious stones are removed (Most of the jewelry in India have precious stones). Pure gold is then extracted through a fire assay test which might take 3-4 hours. You come to know how much gold you really have through this process.
You lose your nerve (You say no) and decide to back out of the gold monetization scheme. You can exit even at this late hour and take your gold back in the form of gold bars.
If you decide to continue with the gold monetization scheme you will be given a certificate (deposit certificate) which says you have ‘X’ quantity of gold with ‘Y’ amount of purity. This certificate is the proof of ownership of the gold. Your gold is then held at the center or even a bank. (Secure Holding).
You take your deposit certificate and approach a bank to make a gold deposit. You submit the deposit certificate and the bank opens a gold savings account in your name paying you interest. The interest you get on your gold deposit is decided by the bank.
You can opt for cash or gold on redemption depending on your preference. You have to compulsorily state your preference at the time of making your deposit.
You have to make your deposit for a minimum tenure of a year to draw the entire interest amounts. If you make a premature withdrawal (Withdraw the amount under a year) you will get a lesser amount of interest.
The returns you get from your gold deposit are likely to be exempt from wealth tax, capital gains tax and also income tax.
You must be wondering if you can deposit any amount of gold without being taxed. If you make gold deposits of over a crore then the tax department will certainly be interested.
Your gold lying locked up in the cupboard is of no use to anyone including yourself. If this gold is brought into the economy India can save on its import bill. We import close to 800-1000 tonnes of gold a year and the Government has placed a heavy import duty to discourage what it regards as a worthless pursuit.
You no longer need to keep your gold locked up in a bank locker paying locker fees. You can now earn interest on your gold under the gold monetization scheme.
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