3 Gold Schemes Lauched by Modi Sarkar

Gold schemes launched by Modi Sarkar

To curb the gold import and to control investors to invest in gold, the PM Narendra Modi has launched three schemes of gold. These schemes are known as gold monetization scheme, gold sovereign bond and gold coin and gold bullion scheme. According to government of India, gold bonds would be more beneficial than physical gold. Interest earned on gold monetization scheme will be exempt from income, wealth and capital gain tax. Now we will highlight main point of these schemes.

Gold Monetisation Scheme:

Under this scheme the minimum deposit at any one time shall be raw gold(bars, coins, jewellery excluding stones and other metals) equivalent to 30 gram of gold of 995 fineness. There is no maximum limit  for deposit under this scheme. The designated bank will accept gold deposit for the short term (1-3 year), medium term (5-7 year) and long term (12-15 year) under this scheme. Interest on deposits under the scheme will start accruing from the date of conversion of the gold deposited into tradable gold bars after refinement or 30 days after receipt of gold.

The gold will be accepted at the collection and purity testing centres (CPTC) certified by Bureau of Indian Standards and notified the central government. The RBI has notified the interest rate 2.25% for medium term and 2.5% for long term deposit. The bank will issue the certificate of gold deposit to the depositors. Premature withdrawal is allowed with minimum lock-in period and penalty determined by banks.

Gold Sovereign Bond Scheme:

The RBI (Reserve Bank of India) will issue gold bonds on behalf of the central government of India. RBI has fixed the price of first tranche of gold bond at Rs 2,684 per gram of gold. The minimum investment limit is 2 gram and maximum investment limit is 500 gram per person in one financial year.

The bond tenure will be 8 years with exit option beginning the 5th years onwards. These bonds will also listed in exchanges for trading. These bonds can be used as collateral for loan purposes. The rate of interest will be 2.75% per annum payable semi annually on the initial value of investment. These bonds will be available only to resident Indian individuals, HUF, trusts, universities and charitable institutions.

Indian Gold Coin and Bullion Scheme:

These coins will be the first ever issued by government and will be bear Ashok Chakra. It is being launched ahead of Dhanteras, a auspicious occasion for purchasing precious metals. These coins will be available in denomination of 5 and 10 grams. A 20 gram gold bars has also been launched. These coins will be available on all MMTC outlets.

The investor can earn some interest benefit for their idle gold which the investors kept in house or banks and gain nothing. However, gold bond will be taxable as per current income tax act. It has been stated the capital gain treatment will be similar as per current physical gold norms. Some experts says that the current scheme will not bring out much gold as people are more concern about tax provision and in future the tax department inquiry about the source of gold.

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Arvind Trivedi

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