By Paul Ploumis 03 Jul 2015 Last updated at 08:38:17 GMT
MUMBAI (Scrap Monster): The Indian government is planning to impose cap on deposits under the proposed gold deposit scheme. Sources close to the Ministry indicate that the gold scheme will have a cap of 100 grams on deposits. The new proposal is under discussion, but a final decision is still pending. The suggestion to cap gold deposits follows concerns that citizens may misuse the scheme to safely place their undeclared gold assets.
The country’s Finance Minister had announced the gold deposit scheme in his fiscal budget. The scheme was primarily intended to bring stashes of idle, unused gold into circulation. However the final implementation of the scheme has been delayed on account of Reserve Bank of India’s objection to include gold deposits in Cash Reserve Ratio (CRR). According to RBI, banks should not be allowed to consider the gold deposits as part of their reserves.
The proposed scheme allows customers to make deposits of gold in any form-gold bars or jewellery, whose purity must be initially confirmed through any of the Bureau of Indian Standards (BIS) certified hallmarking centres in the country. The gold thus collected will be melted and supplied to jewellers and other authorized agencies.
The scheme is expected to offer 3%-4% return to the customer, unlike the earlier gold deposit scheme which offered only 1% return on gold deposit. However, no mention of interest rate offered on gold deposits is made by the government. The Gems & Jewellery Export Promotion Council (GJEPC) has urged the government to provide more clarity on returns to customers.
The draft guidelines released by Indian Finance Ministry states that the returns on gold deposit will be income tax free.