02/12/2016
Gold jewellery and ornaments -
Married lady 500 grams and 250 grams per unmarried lady and 100 grams per
male
"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."
Press
Information Bureau
Government
of India
Ministry
of Finance
01-December-2016
15:58 IST
Government clarifies that the
apprehension sought to be created that the jewellery with the household which
is acquired-out of disclosed sources or exempted income shall become taxable
under the proposed Taxation Laws (Second Amendment) Bill, 2016, is totally
unfounded and baseless.
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 jewellery including ancestral jewellery shall be taxed @75% plus cess with
a further penalty liability of 10% of tax payable.
It is hereby clarified that the
above Bill has not introduced any new provision regarding chargeability of tax
on jewellery. The Bill only seeks to enhance the applicable tax rate under
section 115BBE of the Income-tax Act, 1961 (the Act) from existing 30% to 60%
plus surcharge of 25% and cess thereon. This section only provides rate of tax
to be charged in case of unexplained investment in assets. The chargeability of
these assets as income is governed by the provisions of section 69, 69A &
69B which are part of the Act since 1960s. The Bill does not seek to amend the
provisions of these sections. Tax rate under section 115BBE is 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 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 business
income, and the Assessing Officer detects it as such.
It is clarified that the
jewellery/gold purchased out of disclosed income or out of exempted 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
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 upto 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 income shall become taxable
under the proposed amendment is totally unfounded and baseless.
Source: PIB News