Thursday, 1 December 2016

No tax on gold & jewellery bought with disclosed income

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Amendments to the Income Tax 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 on Thursday. The Lok Sabha earlier this week passed the Taxation Laws (Second Amendment) Bill, which proposes a steep up to 85 percent 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. 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.

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