BUSINESS BEGINS IN ‘BLACK GOLD’

Experts say the only way is to create a paper trail for the gold, especially if bought in black For a commission, jewellers offer to provide bills for gold that is not accounted for

The most common inquiry made at the city’s gold shops on Friday was on how to legalise gold that was unaccounted for.

Another question was how those owning large quantities of gold would handle the situation, following the clarification made by the Centre on Thursday, setting the limit at 500 grams for married women, 250 grams for single women and 100 grams for men.

Experts said gold bought from unaccounted money was illegal. The only way it could be converted was by seeking bills from traders and providing money through cheques.

Some traders had turned it into a moneymaking business, providing bills in return for a certain percentage.

An expert from the bullion market said, “Be it gold or cash, both are assets. If a trader’s turnover is `50 lakh a month, the tax applicable is 30 per cent. Gold bought with the taxed money is white and there is no restriction on its holding. In case the trader decides to show lower income, the gold bought through black money is always paid for in cash and there is no paper trail.”

The expert said, the only way wherein this gold could be made white was through a paper entry. Customers would have to go back to the trader, provide a cheque and seek bills. A few traders will be willing to help these customers provided they are paid a commission.”

At the jewellers, the sale of gold shot up in the week after demonetisation of `500 and `1,000 currency notes on November 8 but is now seeing a major slump.

Gold was at a sixmonth low of `28,170 for 10 gm on Thursday but there were a few takers.

A gold merchant said that with hardly any cash, people were not buying gold. “High sales were only seen for a week after the announcement of demonetisation, but now there are no sales,” he said.

“There is too much of confusion in the market,” said another jeweller.

“People are scared and are not willing to buy gold as they think that they would be taxed. That is not so. If they get a bill and are able to show it in their incometax returns, the gold is through accounted income and is not taxable. But there is a completely wrong message going to people who are getting scared,” a jeweller said.

AT the jewellers, the sale of gold shot up in the week after demonetisation but is now seeing a major slump.