Interest earned on deposits under the central government’s Gold Monetisation Scheme will not attract any tax; gain through trading or redemption will also be exempted from capital gains tax, it was officially reiterated on Sunday. This clarification, didn’t say if the tax deducted at source provision would apply to gains made by the scheme. The government also reiterated that in the course of any search operation by the income tax authorities, gold jewellery “to the extent of 500g per married lady, 250g per unmarried lady and 100g per male member of a family need not be seized”. However, this notification quoted by the government doesn’t exempt depositors from disclosing the source for buying of gold. Since the launch of the scheme on November 5, 2015, a total of 900.1 kg of of gold had been mobilised as of this Wednesday. Apart from reiterating issues already clarified by the Reserve Bank, the note issued on Sunday also said the Bureau of Indian Standards (BIS) had modified the licensing condition for refiners already having an okay from the National Accreditation Board for Testing and Calibration Laboratories from the existing three years of refining experience to one year. This will increase the number of licensed refiners. BIS has on its website invited applications from the 13,000-odd licensed jewellers to each act as a collection and purity testing centre (CPTC) in the scheme, if they have a tie-up with its licensed refiners.
Sectoral sources said the response by jewellers so far had been tepid. Another clarification on Sunday was: “Gold to be deposited with CPTCs/refineries can be of any purity. The CPTC/refiner will test the gold and determine its purity, which will be the basis on which the deposit certificate will be issued.” This, however, doesn’t clarify the situation when refiners differ with a CPTC on purity. The government also said banks were free to hedge their positions in the case of short-term deposits under the scheme.