New Delhi, December 1: Finance Minister Arun Jaitley today clarified the recently Amended Income Tax law in respect to the possession or purchase of gold jewellery. The Amended I-T law will not apply to tax jewellery/gold purchased out of disclosed income or exempted income or reasonable household savings.
According to the recent Income Tax Amended law, there will be no tax applicable on ancestral jewellery and gold at certain limits. The Finance Ministry has clarified that there will be tax exemption on domestic jewellery kept in house and the Income Tax officials are not bound to seize gold jewellery up to 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male in I-T searches. Also Read – Gold regulation: Finance Ministry fixes quantity of gold for married and single women, men
- There is no limit on holding of gold jewellery or ornaments by anybody provided it is acquired from explained sources of income including inheritance.
- Jewellery and ornaments to the extent of 500 gms for a married lady, 250 gms for an unmarried lady and 100 gms for a male member will not be seized, even if the prima facie, it does not seem to be matching with the income record of the assessed.
- Officer conducting searches has discretion not to seize even higher quantity of gold jewellery based on factors including family customs and tradition.
- No tax on ancestral jewellery, purchase from disclosed income.
- Nationwide instructions have been given to the IT department in the matter of search and seizure of unaccounted gold jewellery.
The new amendment in Income Tax was made three weeks after Narendra Modi surprised the nation after demonetisation and on November 29 the Lok Sabha passed Taxation Laws (2nd Amendment) Bill, 2016 that seeks to tax money deposited in banks after Rs 500 and Rs 1000 notes were scrapped.
After demonetisation came into effect rumours started surfacing that the government may impose some kind of restrictions on gold holdings on individuals. Many landed up at jewellery shops after notes were banned and converted their unaccounted wealth in the for of gold. India is the second-biggest gold buyer, where most of the people keep the metal in the form of jewellery.