News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
« General »
 You may not get tax refund if you haven’t validated your bank account
 Senior citizen tax benefits: From income tax to pension – 10 exclusive points explained
 RBI panel pitches for federal body like GST Council in farm sector
 Why should we pay more property tax’
 New income tax rules come into effect from September 1. Latest changes explained
 No tax demand from startups sans appellate tribunal nod: CBDT
 What’s new for 2019 tax returns
 RBI to review minimum balance requirements for savings a/cs
 Income tax returns may have pre-filled mutual fund gains information
 Generation/Allotment/Quoting of Document Identification Number in Notiee/Order/Summons/letter/correspondence issued by the Income-tax Department
  Who all need to file their tax returns

Better tax benefits make gold monetisation scheme attractive
June, 02nd 2016

There has been a weak initial response for the gold monetisation scheme but the government is pulling out all stops to ensure that there are enough incentives for an individual to actually come towards this scheme. There have been several tax benefits that have been announced in the scheme and along with the details of these points it is also important to know the time period from when the benefits will be available. This will be significant for the individual to calculate the actual gains that will come in and hence this needs to be considered. Here are some points related to this aspect of the scheme.

Process

The gold monetisation scheme involves a person or entity that owns physical gold to go and deposit the same with the government. This will involve separating the gold in case of ornaments and then testing it for its purity. Once this is done and the gold is decided to be kept with the government then there would be interest that would be payable on the gold kept. At the end of the time period of the deposit the person would either get back the amount in monetary terms or they would get gold of an equivalent amount. This would give rise to some questions on the tax side and hence these have been addressed by the changes made in the budget.

Interest

The interest that is earned on making such deposits would be low in terms of the percentage figure but it would mean earnings for the gold depositor. This is one of the attractive features of the scheme because it means that the gold of the individual that was lying at home earning nothing would now actually start to pay the person in the form of interest because it now lying with some institution or the government. There is going to be a tax benefit that the holder of the deposit certificate will get as the interest would be tax free in their hands. This is a positive thing as the low deposit rate would now not get further reduced due to the tax impact and this would push up the net return on the instrument for the investor.

No capital gains

Another benefit that the holder of the deposit certificate would be able to get is that now this would not be classified as a capital asset. Once an asset is not classified as a capital asset then this would be out of the ambit of the capital gains tax. This would mean that when the person gets back the gold or the amount in lieu of gold and if there has been an increase in the price of the metal in the interim period then there would be no tax liability that arises for the individual. This makes it more attractive as one does not have to worry about any payment and interference from the tax authorities.

Date of applicability

The best part of the entire process of these tax benefits is that the date of applicability has been chosen as the assessment year 2016-17. This means the financial year 2015-16 which is now already complete. The reason why this is good for a person is that even if they have already given their gold in this scheme they will get the benefit of the tax concessions. Normally any change that is made in the tax workings is usually applicable from the next financial year so it benefits future action. In this case even the past would be covered and this is something that should please anyone who has already made or planned to give gold for the scheme.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Organic SEO Outsourcing Organic Search Engine Optimization Outsourcing Organic Website SEO Organic SEO India Website SEO India Organic Search Engine Optimization India Organic Internet SEO India Organic Web

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions