Seeking to quell apprehensions based on rumours, the government today said there is no limit on legitimate holding of gold and jewellery, including from inheritance, and there would be no seizure of bullion up to a certain limit even if that does not seem to match income.
“There is no limit on holding of gold jewellery or ornaments by anybody provided it is acquired from explained sources of income including inheritance,” the Finance Ministry said in a statement.
As rumours of government crack down on gold holdings raged, the ministry first came out with a statement saying the steeper up to 85 per cent tax in the new Taxation Laws Amendment bill will not apply to legitimate gold holding, including those acquired through inheritance or agricultural income.
However, with apprehensions continuing to persist in the absence of clarity on limit of holding, the ministry came out with another statement hours later saying there is no limit on gold holding from explained sources of income.
The first statement said the taxation laws amendment will not be applied on inherited gold and jewellery as also those items that are purchased through disclosed and agriculture income.
“Jewellery and ornaments to the extent of 500 gms for married lady, 250 gms for unmarried lady and 100 gm for male member will not be seized, even if prima facie, it does not seem to be matching with the income record of the assessee,” it said in the second statement.
Legitimate holding of jewellery up to any extent is fully protected, it added.
The government said it has issued directions that officers conducting search have discretion not to seize even higher quantity of gold jewellery based on factors including family customs and traditions.
Dispelling rumours that jewellery would be covered under the amended law, the Central Board of Direct Taxes (CBDT) earlier in the day issued a statement saying the government has not introduced any new provision regarding chargeability of tax on jewellery.
“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,” the CBDT said. .