Will gold demonetization ever happen was most feared by all people of India. All thought such a thing will ban gold import and reduce purchase of gold as an investment option. Demonetisation of gold did not ever happen, but some thing more powerful than it started on 1-1-2016. What is it. On 1st December 2016, Indian Finance Ministry passed a law amending Income tax about Gold possession limit in India. It’s one shocking breaking news for all black money holders who converted cash into gold. Till now gold was thought as a save investment option to hide black money earned through different ways.
So what is actually black money. It is money earned which has no source and comes through bribes, scam, crime .etc. Also no tax is paid on such cash illegally made and kept in hand without depositing in bank accounts. Demonetization of currency was made to bring an end to such a thing in India. Soon currency notes will be displaced by online transactions using UPI, wallets .etc. Narendra Modi led central government is making it difficult for black money and corruption to happen ever in India. As said by Prime Minister Narendra Modi, he is aiming to bring out entire illegal money earned in India from last 70 years.
What are Gold possession limit in India as per new Income Tax rule. For what quantity of gold taxes has to be paid. This jewelry in possessions should have been purchased using money from a source for which tax has been paid. With this it’s made sure that black money is not used for purchasing gold ornaments or any form of gold. Central Board of Direct Taxes (CBDT) informed that Gold purchased are exempted from taxes if it’s from disclosed income, income exempted from tax, agricultural income, reasonable household savings .etc. Such gold purchase transactions using small incomes of people will not be coming under taxes.
Latest imposing of taxes on gold possession is aimed at people who are holding more than 500 grams of gold without paying tax or disclosing source of money. Latest Income Tax amendment was done to give legal rights to IT Department to conduct raids on suspected places where gold is hidden in large quantities.
Money earned through wrong ways are usually deposited in real estate or gold. To enable actions on illegal possession of gold in India, it was decided to conduct raids by Income Tax department.
Ancestral Gold jewellery that is held by families or women do not come under specified quantity. But it is better to disclose quantity of Ancestral gold in your possession to Incomer tax and get documents on it.
Gold possession limit in India
Now a days antique old style jewelry ornaments are available for purchase from jewelry shops. It will make it difficult to know which is ancestral gold and which is new gold.
Gold possession limit in India as informed by Finance Ministry is as follows.
- Married Women can keep in their possession 500 grams of gold.
- Unmarried Women can keep in their possession 250 grams of gold.
- Men can keep in their possession only 100 grams of gold.
All gold which is disclosed before IT department and purchased using money with source can be posessed and for which tax is given can be held in your custody.
Ancestral gold received from older generations or inherited from parents can be kept in possession. Gold purchased using disclosed income can also be kept.
So to avoid complications if a raid happens, it is better to get your ancestral gold ornaments disclosed before law to verify your gold ownership in India.
India is considered as heaven of gold, with India being second largest importer of gold in India. Around 1000 tonnes of gold are imported and more than that is sold every year in India. In a country like India where there are lakhs of poor people who do not have food, how is it possible for purchase of this much gold.
Answer to this question lies in back money made through bribes, corruptions by people in high positions, politicians .etc. Black money earned in such ways are stored in physical forms or converted into gold. This is real reason why India is one of the biggest markets of gold.
To eradicate black money and make India corruption free, Indian prime Minister Narendra Modi decided to bring new restrictions. Demonetisation of old 500, 1000 notes was his biggest achievement which gave a heavy blow to black money corrupted Indians.
Now through bringing an amendment in Income tax law by imposing gold possession limit in India, Prime Minister Narendra Modi is nearing victory against black money. Earlier Indian government gave one more chance to people to disclose their illegal income.
All those people who disclose their cash without source can pay 50% tax to Pradan Mantri Garib Kalyan Yojana and will get remaining 50% balance cash as white money. If it’s not done before 30 December 2016 and found out after that a tax up to 80% will be levied.