Zee Media Bureau
Seeking to mobilise idle gold worth up to Rs 60 lakh crore held by households and institutions, government has proposed a new scheme offering tax-free interest on depositing the yellow metal with banks.
The draft gold monetisation scheme also provides for incentives to the banks, while individuals and institutions can deposit as low as 30 gms of gold, while the interest earned on it would be exempt from income tax as well as capital gains tax.
Here are the key facts of Gold Monetization Scheme:
Gold savings account: After purity verification, if the customer agrees to deposit the gold, then he will be given a certificate by the collection centre certifying the amount and purity of the deposited gold.
When the customer produces the certificate of gold deposited at the purity testing centre, the bank will in turn open a gold savings account for the customer and credit the quantity of gold into the customer’s account. Simultaneously, the purity verification centre will also inform the bank about the deposit made. The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams, so that even small depositors are encouraged. Gold can be in any form(bullion or jewellery).
Interest payment by banks: The bank will commit to paying an interest to the customer which will be payable after 30/60 days of opening of the gold savings account. The amount of interest rate to be given is proposed to be left to the banks to decide. Both principal and interest to be paid to the depositors of gold, will be valued in gold. For example if a customer deposits 100 grams of gold and gets 1 percent interest, then, on maturity he has a credit of 101 grams.
Redemption: The customer will have the option of redemption either in cash or in gold, which will have to be exercised in the beginning itself (that is, at the time of making the deposit).
Tenure: The tenure of the deposit will be minimum 1 year and with a roll out in multiples of one year. Like a fixed deposit, breaking of lock-in period will be allowed.
Tax Exemption: In the gold deposit scheme (1999), the customers received exemption from capital gains tax, wealth tax and income tax. Similar tax exemptions are likely to be made available to the customers in the GMS afterdue examination.
