New Delhi: The government may actually be eyeing the gold you have at home. Income tax on the gold that one has acquired through undisclosed income has already been doubled from the 30% to 60%. The government on Thursday clarified that there is no plan to tax your jewellery, including ancestral jewellery, at the rate of 75% plus cess and a penalty of 10%. The government listed out the jewellery that will not be taxed. However, the lists of exemption proves that government may be planning raids to find out gold holdings in households.
The new Income Tax law says that in case of "unexplained investments" in gold, you will be taxed at 60% plus 25% surcharge and cess. So the income tax officials are likely to ask you about the source of funds for buying gold. If your are unable to explain, then you are in trouble.
In fact, in its clarification, clearly sets limits for your gold holdings. It says in case of search and seizure, only following categories/gold deposits will be exempted
1. Gold jewellery/ornaments of 500 gms per married lady
2. Gold jewellery/ornaments of 250 gms per unmarried lady
3. Gold jewellery/ornaments of 100 gms per male member
4. Inherited jewellery acquired from known sources of income
5. Jewellery bought from explained household savings
6. Jewellery bought from explained sources of income
7. Legitimate holdings of any amount
If you read between the lines, all the exemptions are very subjective and you will find it hard to explain in case of a search or seizure operation of Income Tax.
The government has justified the changes in law saying that many blackmoney hoarders have undisclosed income into gold after note ban. (News24Bureau)