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No Tax On Gold Jewelry Purchased With Disclosed Income

Mr. C.S. Sudheer | Posted On Friday, December 02,2016, 04:51 PM

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No Tax On Gold Jewelry Purchased With Disclosed Income

 

 

You and all the people in our country love gold. When it comes to buying gold, there are no divisions in India. Both people in rural and urban areas, as well as people across religions, buy gold. Just go and see people buying gold at jewelry stores….You’ll find everyone there, keenly making their gold jewelry purchases.

But there’s a small problem…Purchasing gold jewelry and ornaments, are an excellent way of hiding black money. Just as the honest citizens of our country buy gold, so do the black money hoarders. The Government wants to put an end to this practice of buying gold, just to hide black money. How is the Government going to catch black money hidden in gold? Well, it’s come up with a new set of rules….What are these new rules….Just read on…

Mis-selling of financial products is widespread in the country. Your agent might sell you a financial product, which doesn’t meet your requirements. He might neglect to tell you some details on the financial product, knowing which you would not have purchased that product. IndianMoney.com offers Free, Unbiased and on-call financial advice, making sure you invest only in the financial product, which meets your needs. Just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website

See Also: Ministry Of Finance In India

Have Undisclosed Gold More Than 500 Grams? The Tax Department is Interested

The Government has reached the next level in its fight against black money. This fight is against black money hidden in gold. The Government says…In an income tax raid, there will be no seizure of gold jewelry and ornaments up to 500 grams for a married woman, 250 grams for an unmarried lady and 100 grams for a male member of the family. Yes…even if the gold does not match your known sources of income, the income tax department will not seize your gold jewelry and ornaments, within these prescribed limits. So does this mean, the government will seize all your gold jewelry and ornaments, which are more than this limit?

You can hold gold jewelry and ornaments up to any extent provided it is from explained sources of income like agricultural income, reasonable household savings and yes….legally inherited ancestral gold. Gold jewelry purchased out of your disclosed income (income on which you have paid tax)? There’s no need to worry….No tax will be charged on this gold, nor will it be confiscated. You can have any amount of gold jewelry and ornaments, provided….this gold has been obtained legally, from explained sources of income.

Now rumors are flying…Gold jewelry that you have inherited from your ancestors will be taxed at 75% + cess, with a further penalty of 10%. Absolute rubbish says the Government…You can hold gold jewelry and ornaments up to any extent provided it is from explained sources of income.

See Also: Apply For Home Loan

You Hold Undisclosed Gold? What to Do?

Even if the amount of gold you own, does not match your known sources of income, the tax department will not seize your gold, up to prescribed limits. However steep taxes and penalty will be imposed on undisclosed gold, caught in a raid.

Is there a way of escape….

  • The tax officer may decide to spare even larger quantities of gold if you say this gold is part of your family customs and traditions.
  • If you have been paying wealth tax, only gold jewelry and ornaments in excess of the declared gross weight will be seized, by the tax department. You need to show tax receipts that prove you have paid wealth tax, until FY 2014-2015. Wealth tax was abolished after this year.
  • You can always say… you have inherited gold from your ancestors. Show a will that proves that gold has passed into your possession, from your ancestors. You can even show photographs, that indicate your gold jewelry is inherited and not a new buy. There is no clear way to show your gold was inherited…but the taxman could find it difficult to prove, that your gold was not inherited.
  • You can always say the gold was a gift and show proof of it. The gifts you receive from certain specified relatives are tax-free in your hands.

Yes….if you have not hidden black money in gold….there’s no need to worry. The Government will not come after you. These laws are only for citizens, hiding black money in gold.

See Also: How to File Income Tax Complaint?

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