Amended Income Tax law will not tax ancestral jewellery: Finance Ministry clarifies

There will not be any tax on gold purchased with accounted income.

Finance Minister Arun Jaitley on Thursday clarified that as per the amended Income Tax laws, jewellery or gold purchased out of disclosed income or exempted income will not be chargeable to tax.

The same will be applied to jewellery brought out of household savings. The Finance Ministry further explained that ancestral Jewellery or gold legally procured out of explained sources, will not be taxed either.

“The gold jewellery to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male will not be seized,” the Finance Ministry said.

The Lok Sabha on Tuesday passed the Taxation Laws (Second Amendment) Bill2016 which levies a tax of 50 per cent on the amount deposited post demonetisation.

The bill was apparently proposed to provide a window to the black money holders to legalise their wealth. As per the amendment, 85 percent tax penalty will be levied on people depositing their undisclosed wealth after 30 December.

Backing the move, Finance Minister Arun Jaitley asserted that the government moved amendments in the Income-tax laws after noticing that a lot of people had been desperately trying to convert their black money into white after demonetisation of higher denomination currency notes.

The Income Tax law also makes it mandatory for the black money declarants to deposit 25 per cent of the amount disclosed in an anti-poverty scheme without zero-interest and a four-year lock-in period.

Also,  a tax at the rate of 30 per cent will be levied on the people who choose to declare their unaccounted income in now banned 500 and 1000 rupee notes under the Pradhan Mantri Grabi Kalyan Yojana 2016.