Gold deposit scheme opens
Source:Hindustan Times, September 15
publicised Gold Deposit scheme announced by Finance Minister Yashwant Sinha in the current
years budget has been made operational by the Vajpayee Government in the midst of
Lok Sabha elections. According to a Finance Ministry notification issued on Wednesday, the
scheduled banks would accept gold deposits from individuals, companies, charitable and
religious institutions in the form of bars, coins and gold jewellery.
intending to deposit gold will have to apply in prescribed forms provided by designated
banks. Against the deposited gold, the banks will provide a gold certificate or statement
of account or a passbook to subscribers of the scheme.
stated that the gold deposit scheme will come into effect immediately. It is likely to be
an on-going scheme as the Finance Ministry has not announced the closure date. Subscribers
of gold deposits scheme would be entitled to interest payments as rates announced by the
Reserve Bank of India (RBI). The interest rates are expected to be on the lines of rupee
deposits made by individuals in banks. There will not be any bar on the amount of gold to
be deposited in the bank. But,no one would be entitled for claiming amnesty on unaccounted
gold deposited in the banks under this scheme.
individual depositing gold in an RBI designated bank can avail the nomination facility on
the lines of usual rupee deposits. The gold certificates are transferable by endorsement
to North Block officials, the scheme prescribes a mandatory lock-in period for gold
deposits made with banks. The lock-in period or mandatory storage time will have to be
adhered to by subscribers before the deposits are withdrawn.However, the banks would be
able to release gold prematurely either in the form of gold or in cash equivalent to the
price of gold on the date of encashing the gold certificate. But, premature release would
be done after expiry of the prescribed lock-in period.
Finance Minister, through his budget proposals, had announced exemption of interest
accruals on gold deposits from income tax. The value of gold assets deposited with the
banks under the scheme have also been exempted from wealth tax.
these gold deposit bonds and certificates are tradable instruments, any profit made on
trading or redemption of gold has been exempted from capital gains tax as well.
states have also been asked by the Finance Minister to exempt the movement of gold covered
under the scheme from octroi, sales tax, stamp duty and similar levies. The foreign
exchange savings due to reduced gold import is expected to be substantial. India is
regarded as the largest gold importer after US.