New Delhi: A married women can hold up to 500 grams of jewelry/gold and unmarried women can keep 250 grams of jewelry/gold without being questioned under the proposed Income Tax Law, while the limit for holding jewelry/gold for men is only 100 grams, the government said today seeking to set at rest certain apprehensions generated under the proposed law.
The Government also clarified that it will not make a seizure or tax gold/jewelry in case it is purchased from disclosed 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.
In the clarifications issued by the Finance Ministry, it is said that during the search operations, no seizure of gold jewelry and ornaments to the extent of 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family shall be made. Further, legitimate holding of jewelry up to any extent is fully protected. In view of the above, the apprehension sought to be created that the jewelry with the household which is acquired out of disclosed sources or exempted income shall become taxable under the proposed amendment is totally unfounded and baseless.
In the clarifications issued today, it is also said that in the wake of Taxation Laws (Second Amendment) Bill, 2016 which has been passed by the Lok Sabha and is under consideration with Rajya Sabha, some rumours have been making rounds that all gold jewelry including ancestral jewelry shall be taxed 75 per cent plus cess with a further penalty liability of 10 per cent of tax payable. It is also clarified that the above Bill has not introduced any new provision regarding chargeability of tax on jewelry. The Bill only seeks to enhance the applicable tax rate under section 115BBE of the Income-tax Act, 1961 (the Act) from existing 30 per cent to 60 per cent plus surcharge of 25 per cent and cess thereon.
This section only provides rate of tax to be charged in case of unexplained investment in assets. As per the clarifications, tax rate proposed to be increased only for unexplained income as there were reports that the tax evaders are trying to include their undisclosed income in the return of income as business income or income from other sources. The provisions apply mainly in those cases where assets or cash etc. are sought to be declared as ‘unexplained cash or asset’ or where it is hidden as unsubstantiated business income, and the Assessing Officer detects it as such. (UNI)
