Gold lying idle may earn tax-free-interest with GOLD MONETISATION SCHEME

 

Investment of funds in gold has always been in tradition. But what once you invest in gold? It keeps lying idle at home or locker.

What if you get some interest on the gold you have purchased or if you are thinking of investing in gold and you receive few financial profitable options?

 

This was among a number of proposals announced by Finance Minister Arun Jaitley in the Budget 2015-16. In regard to this, the Cabinet approved Gold Bond and Gold Monetisation schemes.

Gold lying idle may earn tax-free-interest with GOLD MONETISATION SCHEME.

To evaluate the pros and cons of each scheme, let us first understand these schemes.

 

GOLD BOND SCHEME

• The bonds shall be issued by RBI on behalf of the finance ministry
• Instead of buying physical gold, Indian residents can buy the gold bonds
• The annual cap for such bonds will be restricted to 500g per person per year
• The interest rate would be subject to revision
• The bonds will be issued in denominations of 5g, 10g, 50g and 100g of gold or other denominations
• Minimum tenor shall be five-seven years
• If gold prices go up, the value of the bond price also goes up by the same amount

 

GOLD MONETISATION SCHEME

• Anyone who has gold as idle asset can deposit them with authorised agencies
• Take advantage of the price escalation of gold
• This shall help investors earn interest on the gold they own
• Tenure may be short, medium or long-term
• Investor shall receive Certificates of Holding indicating that they bought a certain amount of gold
• At the time of redemption people can get the actual value of gold and physical gold can be obtained if it is a short-term deposit
• Interest payable after 30/60 days of opening of the account
• Interest earned shall be exempted from income tax and capital gain tax
• A person or institution holding surplus gold can get it valued from BIS- approved hallmarking centres
• Gold lying idle may earn tax-free-interest with GOLD MONETISATION SCHEME

 

If these schemes work out, then import of gold into the country can substantially be reduced. Jaitely also highlighted that India imports as much as 800-1000 tonnes of gold each year, draining away precious foreign exchanges of the country. Thus, such gold bond scheme could help reduce India’s gold imports by as much as $10 billion (Rs. 60,000 crore at 60 rupee per US dollar).

 

However, Jaitely clarified that these schemes are not black money immunity schemes. He said “This is not a black money immunity scheme and normal taxation laws would be applicable,”

 

With coming of such schemes, now, we can earn interest on gold owned and for investors who are thinking to invest in gold in near future then they shall definitely take up these schemes for better earning and safety prospect.

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