Friday 2 December 2016

Sona Kitna Sona Hai Is the Rhetoric Question of the Day!!

Government is surprising us left and right these days. And well, its amusing to see people who thought this investment was safe, that investment was safe to sit with a calculator and calculate corresponding taxes.

An Indian favorite, something that pleases your wife and is a public display of your wealth, some family heirloom, while some just coins waiting to be encashed in times of need. We are golden people, quite literally like Bappy Lahiri.


Gold Bina Chain Kahan Re

So, what now? Do we pay tax on all the jewelry we have in our bank lockers? or personal lockers? Or the ones we are currently wearing? Who will wear the jewelry when seized? To help you out with the questions, let's understand what the Government is actually saying:

No tax will be imposed on jewellery/gold purchased out of disclosed income. 

The disclosed income is one in your bank or the cash balance that you pay tax on..post disclosure. Jewelry can mean all sorts of jewelries..platinum, gold, diamond. They also mention gold separately because some people prefer buying gold with investment prospects- rich in bricks and poor in coins. It also includes exempted income and reasonable household savings. Obviously no woman saves around 5-10 lacks as household saving. The reasonability of a saving can be determined on the basis of the average household income that you have.

The Amended I-T Act will also not apply to tax ancestral jewellery and gold.

So you have rich ancestors or family heirlooms running from generation after generation. We have seen movies where the saas handing over the khaandani kangans to the bahu made us set daughter-in-law goals. So the ancestral jewelry would also not be covered under the Act, because we value the Indian culture of khandaani zevar!!




No seizure of gold jewellery up to 500 gm per married lady, 250 gm per unmarried lady and 100 gm per male in I-T searches.
The Government thinks that 500 gms(approx 15 lacs as per current rate) is adequate jewelry a married lady should own during her lifetime. Little do they understand that wearing the same jewelry to every family function would make them look so normal. Ostentatiousness runs in our blood and we like to flaunt. Nevertheless, the flaunting comes at a risk now. 

Some questions, that may arise, considering the financial paranoia we are waking up with these days. Let us understand this better:

Q: Is there a limit on the amount of jewelry one can hold or purchase?

A: No, there's no limit as long as the jewelry has been purchased from disclosed income, exempted income (like agricultural income), reasonable household savings and inheritance.

Q: How can the Government seize our gold?

A: The limits specified, namely 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male are only applicable when any search proceedings are going on by the Income Tax department, which in other terms we also refer to as raid!! 



The search proceedings are initiated by the Government if the Authorized Officer is in possession of information that:

  • You were served a summon u/s 131(1) or a notice u/s 142(1) to produce books of accounts or documents, and you failed to produce the same.
  • If a summon u/s 131(1) or a notice u/s 142(1) is issued or might be issued, the officer believes you are not likely to produce or caused to be produced books of accounts or other documents relevant for such proceedings
  • You are in possession of money, bullion, jewelry or other valuable article or thing and such property wholly or partly has not been or would not be disclosed.
Q: When a search is being conducted and its part of the family tradition to have that kind of jewelry, what then?
A: It is the discretion of the officer conducting the search not to seize higher quantity of gold jewelry based on factors including family customs and traditions.


So all those who rushed to the jewelers converting their black money into gold was a sane idea, who's laughing now?!


P.S. Have more questions. Post in the comments.


No comments:

Post a Comment