Investments in Gold & Proposed Income Tax Law
Your
gold is safe. 500 grams per married woman will not be seized
During search operations,
conducted by I-T Department, there would be no seizure of gold jewellery and
ornaments to the extent of 500 grams per married women, 250 grams per unmarried
women as also 100 grams per male member of the family, it said.
Highlights
·
1 Married
women can keep 500 grams at home.
·
2 250
grams per unmarried women is allowed.
·
3 Per male
member of the family is allowed to keep 100 grams.
Details
Amendments to the I-T
laws do not seek to tax inherited gold and jewellery as also those items that
are purchased through disclosed or agriculture income, the government said
today.
The Lok Sabha earlier this week
passed the Taxation Laws (Second Amendment) Bill, which proposes a steep up to
85 per cent tax and penalty on undisclosed wealth that is discovered by tax
authorities during search and seizure.
Dispelling rumours that
jewellery would be covered under the amended law, the Central Board of Direct
Taxes (CBDT) said the government has not introduced any new provision regarding
chargeability of tax on jewellery.
"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," the CBDT
said.
NO
SEIZURE OF GOLD FROM MARRIED WOMEN
During search operations,
conducted by I-T Department, there would be no seizure of gold jewellery and
ornaments to the extent of 500 grams per married women, 250 gm per unmarried
women as also 100 gm per male member of the family, it said.
"Further, legitimate
holding of jewellery up to any extent is fully protected," it added.
The Bill, which is currently
under consideration of the Rajya Sabha, will amend Section 115BBE of the Income
Tax Act to provide for a steep 60 per cent tax and a 25 per cent surcharge on
it (total 75 per cent) for black money holders.
Another
section inserted provides for an additional 10 per cent penalty on being
established that the undeclared wealth is unaccounted or black money, taking
the total incidence of levies to 85 per cent.
CBDT said: "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."
PENALTY
The Bill also proposes to raise
penalty under I-T Act for search and seizure cases by 3-fold to 30 per cent, a
move aimed at deterring black money holders, from 10 or 20 per cent currently.
Once the amendments are
approved by Parliament, there would be a penalty of 30 per cent of unaccounted
income, if admitted and taxes are paid. This would take the total incidence of
tax and penalty to 60 per cent.
While proposing to amend
Section 271AAB, the government has decided to retain the provision of levying
penalty of 60 per cent of income in "any other cases". That would
raise the incidence of tax and penalty to 90 per cent.
During 2015-16, the I-T
Department conducted 445 searches which discovered undisclosed income of Rs
11,066 crore. Total assets seized were Rs 712.68 crore.
Also 545 searches conducted in
2014-15 have led to admission of undisclosed income worth Rs 10,288 crore.
Total assets seized amounted to Rs 761.70 crore.
Besides, 569 searches in
2013-14 saw admission of undisclosed income of Rs 10,791.63 crore and asset
seizure of Rs 807.84 crore.
This took the total undisclosed
income which was admitted during searches to Rs 32,146 crore.
Search and seizure operations
are conducted by the tax department when the Assessing Officer believes that
the assessee is unlikely to produce books of accounts or likely to suppress
books of account and other documents which may be useful and relevant to an
income tax proceedings.
GOVERNMENT
CLARIFICATION
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 per cent
plus cess with a further penalty liability of 10 per cent 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 per cent
to 60 per cent plus surcharge of 25 per cent 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.
With PTI
inputs
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