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Gold Amnesty Scheme in Working. High Tax Penalty on Unaccounted Gold can be introduced

Gold Amnesty Scheme in Working. High Tax Penalty on Unaccounted Gold can be introduced

Gold Amnesty Scheme can be introduced by Government in 2020 with High Tax Penalties on unaccounted Gold. Report on Gold Amnesty Scheme

 

Gold Amnesty Scheme

Prime Minister Narender Modi can soon announce Gold Amnesty Scheme in an attempt to fight against corruption. This can be a big move and slight tricky also as Gold is seen as asset which is passed from one generation to next generation and many of them may not be having the actual bill of date of purchase.

As per report cited in Mainstream Print Media there is a possibility that

» A Certain Threshold Limit will be announced for Male, Female with a clubbed Family Level Limits and Individuals carrying Gold beyond the threshold limit need to declare same

» Either a proof of purchase with valid source of funds to be explained or if unaccounted Gold then pay taxes on Threshold Value

Tax Rates can well be in line with other Amnesty Schemes floated earlier by Government. The Proposal is well in consideration by Finance Ministry. However there are many challenges to it

  • Been Gold Jewellery is gifted in marriages in India and preserve as asset, it would be lot difficult to provide Bill for same
  • Gold is inherited by many families from generations. Providing a bill or source may not be easy
  • Religious Institutions have tonne of Gold. What would be Government Policy on same
  • Typical Jewellery can have Kundan, other Gemstones, Diamond along with Gold. Who will assess weight of Gold, Valuation for Tax Purpose

The Challenges are many and although it may look easy to write that Gold Amnesty scheme can be rolled but when it comes to Nitty Gritty. Also for those who wont be able to furnish proof of family owned Gold Jewellery it would be big challenge to tax them by 1/3rd of Value of Gold. Will there be any declaration at all ?

Framework not going to be easy and lot many challenges in it. The Proposal was earlier forwarded by Niti Aayog but rejected by Income Tax department. Lets see what all modifications to proposal with Nitty Gritty framework designed by Government to actually turn it to reality.

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Sunday, 25 October 2020

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