On Thursday, the government quashed the rumours that the ancestral jewellery will be taxed under the Taxation Laws (Second Amendment) Bill 2016 and said that there will be no tax on gold bought from the disclosed income sources.
No tax on gold bought through disclosed/exempted income
“It is clarified that the jewellery/gold purchased out of disclosed income or out of exempted income like agricultural income or out of reasonable household savings or legally inherited which has been acquired out of explained sources is neither chargeable to tax under the existing provisions nor under the proposed amended provisions.”
-a government statement said
In a following statement the government said – “Jewellery and ornaments to the extent of 500 gms for a married lady, 250 gms for an unmarried lady and 100 gm for the male member will not be seized, even if prima facie, it does not seem to be matching with the income record of the assessee.”
Also, the GOI made it clear that all the gold holdings bought with the disclosed income will not be taxed and thus any amount of jewellery bought through legitimate means is absolutely safe.
However, there has not been any statement on the chargeability of tax on gold as yet by the government as clarified by the notification of the Central Board of Direct Taxes (CBDT) on Thursday. It said – “The jewellery/gold purchased out of disclosed income or out of exempted income like agricultural income or out of reasonable household savings or legally inherited which has been acquired out of explained sources is neither chargeable to tax under the existing provisions nor under the proposed amended provisions.”
CBDT further said that the tax rate as under section 115BBE of the Income Tax Act will be increased for the undisclosed income sources primarily in cases where the illegitimate income is described as ‘unexplained cash or asset’ by many of the black money hoarders.
