Dec 06, 2016 2 min read

Government Restricts Gold Holdings by Individual! Know the Effects

Gold holdings have been limited by government in order to curb black money. Know its consequences and the best opportunities for you.
If you are a gold investor and gaining profits on your gold investments, then this is an alarming moment for you as the government of India has put limitations on the gold holdings possessed by an individual. One will now have to disclose every single detail about how he/she acquired it. So let us examine the entire scenario and look out for the opportunities among it.

After demonetisation, Prime Minister Narendra Modi, has targeted gold investments to curb black money. Those individuals who invested their black or undisclosed money in gold are going to get affected by the latest announcement made by PM in regards to the holding of physical gold in the form of ornaments or bullion. So it is quite alarming for all the gold investors who invested their monies in order to secure their future. Although the declaration would not affect the people who have a legal proof on the purchase of gold, but the ones who put their black money in gold to convert it into white might get targeted in such a circumstance.

The major points of consideration regarding gold holdings include the following as per the latest amendments in the Income Tax Act:

  1. Gold purchased out of disclosed income shall not be liable for taxes under the Act.
  2. These amendments are not applicable on the jewellery or gold which is obtained from ancestors. Although one needs to prove the same.
  3. An individual being a married woman can own up to 500 grams gold in her name, and an unmarried woman up to 250 grams. Whereas, a male individual can hold up to 100 grams gold in his name.
  4. Apart from this, the holdings shall fall under the tax bracket, and CBDT(Central Board of Direct Taxes) would have every right to investigate such holdings. And in case they are found to be acquired by illegal means, the holder shall be liable to pay taxes or penalty or both.

How Much is an Investor Affected?

Being a gold investor you might think that you would not be able to gain substantial income from gold investments anymore. But you are wrong. Although you cannot hold physical gold above the specified limits, you still have the option to invest in the gold funds. They are the instruments which derive their value from the underlying gold commodities. There are various mutual fund programmes which provide gold investment opportunities to the investors to invest their capital in them so as to gain higher income.

Gold is considered to be the most promising investment asset which offers considerably higher returns over time. Hence, Indians are indulged in investing their money into gold ornaments. With this amendment in the I-T Act, though one needs to limit his/her gold purchases, the gold funds can be a better option to yield the same return. Kotak Gold ETF, SBI ETF Gold, Birla Sun Life Gold ETF are some of the mutual fund schemes which can offer you greater returns by investing in gold.

So, if you have to make your investments secure by putting your capital in gold instruments, then you must opt for any of the gold funds. We, at MySIPonline, can assist you in doing so. You must get associated with us to avail maximum benefits irrespective of the market changes.

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