Zee Media Bureau
New Delhi: The Cabinet on Wednesday approved the gold monetisation scheme, which proposes to offer tax-free interest to individuals on depositing the yellow metal with banks.
The draft gold monetisation scheme was announced in May, proposed to provide incentives to the banks while individuals and institutions can deposit as low as 30 grams of gold.
Also Read- Gold deposit and bond schemes: Key facts you should know
It also proposed that the interest earned on it would be exempt from income tax as well as capital gains tax.
The stock of gold in India that is held by people that is 'neither traded nor monetized' is estimated to be over 20,000 tonnes, which would be worth about Rs 60 lakh crore at the current market price.
India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tonnes each year.
According to the draft guidelines, a person or institution holding surplus gold can get it valued from BIS-approved hallmarking centres, open a gold savings account in banks for a minimum period of one year and earn interest in either cash or gold units.
The scheme, which is proposed to be initially introduced only in select cities, was announced in the Budget this year by Finance Minister Arun Jaitley.
"The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. Banks/other dealers would also be able to monetize this gold," Mr Jaitley had said.
The proposed scheme is aimed at monetizing idle gold held by households and institutions, provide a fillip to the gems and jewellery sector and reduce reliance on import of the metal over time to meet the domestic demand.
Under the scheme, the bank interest to the customers will be payable after 30/60 days of opening of the gold savings account.
With Agency Inputs
