Bought gold? Get set to invest in gold scheme

MUMBAI: The government is likely to use the data on the amount of gold purchased in the last 11 days to boost its gold monetisation scheme.

Gold has been the most sought-after commodity to convert idle and unexplained money ever since the government announced the demonetisation move on November 8. Thousands have bought gold using invalid currencies of ₹500 and ₹1,000.

According to people aware of the development, the income tax and customs departments are keeping a close watch on such purchases, and could come up with a scheme to allow the taxpayer to invest a certain part of his gold buys in the monetisation scheme.

Around 5.73 tonnes of the yellow metal have been collected so far since the launch of the gold monetisation scheme on November 5, 2015, said the sources quoted above.

The government is still working out the contours of such a proposal, which could well be part of its second phase to curb black money, they added.

Prime Minister Narendra Modi has already hinted at his next course of action during his recent Goa visit. “I am not going to stop at this. I will expose the history of corruption of 70 years since Independence,” Modi had said, adding, the government will unmask benami property owners.

“The jewellers are able to show these (gold purchases since November 8) as Diwali sales and hence a lot of that money has been regularised,” said one trader who asked not to be named. While an average of 50-70 kilogrammes were converted in the initial days, the amount has since increased with one Mumbai jeweller selling more than 200 kgs in a single day.

Customs officials are already tracking sales of around 500 jewellers in the country. The black market rate for such gold purchases is above ₹50,000 for 10 grammes, 61% above the official rate of ₹31,000.

The government is looking at bank deposits of gold traders who have been splitting large sums into tranches of ₹2-2.5 lakh. It is also monitoring property deals where the cash component has gone up. The current regulation – Benami Transactions (Prohibition) Amendment Act — which came into force from November 1 applies if a property is in one name but paid for in another.

By virtue of the new law, all deals will be covered by tax authorities.