Govt Tweaks Gold Mon­eti­sa­tion Scheme

The Economic Times - - Economy & Companies - Our Bureau

New Delhi: The gov­ern­ment has fur­ther mod­i­fied the Gold Mon­eti­sa­tion Scheme (GMS) to make it more at­trac­tive for the in­vestors.

In a state­ment, the finance min­istry noted that at the time of ma­tu­rity the de­pos­i­tor will be pro­vided an op­tion to re­deem the prin­ci­pal ei­ther in In­dian ru­pee equiv­a­lent or in gold.

“Where the redemp­tion of the de­posit is in gold, an ad­min­is­tra­tive charge at a rate of 0.2% of the no­tional redemp­tion amount in terms of In­dian ru­pee shall be col­lected from the de­pos­i­tor,” the state­ment noted.

This op­tion was there ear­lier as well but the choice had to be stated at the time of de­posit. How­ever, the in- ter­est ac­crued on Medium and Long Term Gov­ern­ment De­posits (MLTGD) will be cal­cu­lated with ref­er­ence to the value of gold in terms of In­dian ru­pees at the time of de­posit and will be paid only in cash.

The min­istry said the mod­i­fi­ca­tion will make the scheme more at­trac­tive for po­ten­tial de­pos­i­tors, which so far has re­ceived lit­tle in­ter­est and around 3 tonnes of gold has been de­posited.

In the Bud­get 2016-17, the gov­ern­ment had pro­posed to ex­tend tax ben­e­fits to in­vestors de­posit­ing their gold un­der the GMS, 2015 by ex­empt­ing it from cap­i­tal gains tax. In­ter­est re­ceived from this scheme is also pro­posed to be ex­empted from tax. In Jan­uary, the gov­ern­ment had tweaked the scheme and al­lowed medium-term de­posit to be with­drawn af­ter three years and any long term de­posit af­ter five years, sub­ject to a re­duc­tion in the in­ter­est payable. The scheme was launched last year by Prime Min­is­ter Naren­dra Modi with an aim to curb gold im­ports, and bring down the coun­try’s cur­rent ac­count deficit. It is es­ti­mated that 22,000 tonnes of idle gold is ly­ing with In­dian house­holds.

FILE PHOTO

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