India proposes new scheme offering tax free interest on gold deposit

Government has came out with a draft scheme under which a person or entity can earn interest by depositing the metal with banks. As per the draft guidelines released by Finance Ministry, minimum gold deposit is proposed at 30 grams and the interest earned on it would be exempt from income tax as well as capital gains tax.

The draft also mentioned that a person or institution holding surplus gold can get it valued from BIS-approved hallmarking centres, open a Gold Savings Account in banks for a minimum period of one year and earn interest in either cash or gold units.

The Finance Ministry has also sought comments from stakeholders on the draft gold monetisation scheme by June 2.

The gold monetisation scheme, which is proposed to be initially introduced only in selected cities, was announced in the Budget this year by Finance Minister Arun Jaitley.

The scheme is aimed at mobilising idle gold held by households and institutions, provide a fillip to the gems and jewellery sector and reduce reliance on import of gold to meet the domestic demand.

India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tonnes of the yellow metal each year.

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