During the lockdown Amid a crash in gold imports, it was announced by the government that the jewelers and bullion dealers on the way to tap idle gold lying with the Indian households. By aligning the income tax law with gold deposit scheme, raising gold holding limits, for making it more attractive – tweaking the gold monetization and to give more flexibility for the local refineries as a part to scale up border gold policy based on the proposals of the industry, all these suggestions were examined by the government.
Till now, the decisions regarding garnering deposits of 20 tons of gold and the monetization of the existing gold scheme are yet to take off. In India, it is estimated that the private gold stock at 25000 tons which worth Rs 110 lakh crore. For the families, those who accumulate gold over the years, and if they are purchased with their earnings there also do not have adequate documents to back this. It said by the jeweler that many of the families are reluctant to participate in the revamped gold deposit scheme because of the fear of the questioning by the tax officials.
In this context, it was proposed to the government by the Gem and jewelry Export Promotion Council (GJEPC) to link the gold monetization scheme along with the Income Tax Act. In this act, it was also stated that a family need not be seized under the cases where the extend of 500 grams of gold jewelry per married woman and for per unmarried woman it is extended to 250 grams of gold jewelry and for the main member of the family extends to 100 grams.
The industry feels that all these limits fixed in 1994 should be revised to 1kg, 500 grams, and 200 grams respectively. This existing gold deposit scheme will allow earning interest but it lacks flexibility. Due to the COVID lockdown, the bullion imported by banks and the import of more bars by importers has come down. From the recycling of Jewelry scrap by gold refiners, the physical demand from the jewelry trade is being met. James Jose MD of GCR Metalloys said that banks should be permitted to open gold metal accounts for customers. Instead of buying gold from refineries abroad, the banks should permit to buy bullion from BIS licensed gold refineries, this will help the customers and jewelers to resell their old gold to the local refiners for conversion to bullion, said by Jose who is the secretary of the Association of Gold Refineries and Mints.
