The new scheme would allow gold hoarders to come clean on investment made using black money by declaring their possession and paying tax on it.
The government may soon announce a new amnesty scheme to bring hordes of black money used in buying gold considered a safe investment option in India.
According to sources, the new amnesty scheme would allow gold hoarders to come clean on investment made using black money by declaring their possession and paying tax on it.
However, the tax will have to be paid on entire value of gold declared by an individual that has been purchased without any receipt.
Though the rate of tax is yet to be worked out by the government, sources indicated that the thinking is to keep the rate at around 30% level with an effective rate of around 33% including education cess.
Attempt to unearth lakhs of crores of black money
Moreover, the new scheme is being considered as yet another attempt to unearth lakhs of crores of black money still lying in the system in the form of unaccounted gold.
It would also try to overcome limited success of an earlier amnesty scheme Pradhan Mantri Garib Kalyan Yojana, also known as IDS-II, launched in 2017, post the demonetisation exercise.
“The idea of the scheme is good but its effective implementation is difficult. It would be hard to push people to declare if they have lost almost a third of the value,” said an analyst aware of contours of the amnesty scheme.
Also, there is fear that after declaration of the wealth, an individual may be prone to harassment by tax officials.
However, it happened during the last two income declaration schemes (IDS) where tax officials were found to be seeking response from people making declarations to explain their source of income.
In fact, lakhs of SMSs were sent by tax officials seeking response from cash depositors during the time of demonetisation.
#NewsAlert – Big step by Centre after demonetisation: Government proposes amnesty scheme for gold which will have to be declared with receipts. To tighten noose around those who invest black money in gold. pic.twitter.com/YwnQRhNf5i— News18 (@CNNnews18) October 30, 2019