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Gold jewellery to be taxed at 75 pct with additional 10 pct cess in accordance with Taxation Laws

ANI  |  New Delhi [India] 

In the wake of Taxation Laws (Second Amendment) Bill, 2016 which has been passed by and is under consideration with Rajya Sabha, some rumors have been making rounds that all gold jewellery including ancestral jewellery shall be taxed at 75 percent plus cess with a further penalty liability of 10 percent of payable.

It is hereby clarified that the above Bill has not introduced any new provision regarding chargeability of on jewellery. The Bill only seeks to enhance the applicable rate under section 115BBE of the Income-Act, 1961 (the Act) from existing 30 percent to 60 percent plus surcharge of 25 percent and cess thereon.

This section only provides rate of to be charged in case of unexplained investment in assets. The chargeability of these assets as is governed by the provisions of section 69, 69A and 69B which are part of the Act since 1960s.

The Bill does not seek to amend the provisions of these sections. rate under section 115BBE is proposed to be increased only for unexplained as there were reports that the evaders are trying to include their undisclosed in the return of as or from other sources.

The provisions of section 115BBE 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 income, and the Assessing Officer detects it as such.

It is clarified that the jewellery/gold purchased out of disclosed or out of exempted like agricultural or out of reasonable household savings or legally inherited which has been acquired out of explained sources is neither chargeable to under the existing provisions nor under the proposed amended provisions.

In this connection, a reference to instruction No.1916 is also invited which provides that during the search operations, no seizure of gold jewellery 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 jewellery up to any extent is fully protected.

In view of the above, the apprehension sought to be created that the jewellery with the household which is acquired out of disclosed sources or exempted shall become taxable under the proposed amendment is totally unfounded and baseless.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 01 2016. 16:28 IST