No tax on ancestral jewelry, legitimate holding of jewelry up to any extent is fully protected
 Source : News Bharati English  Date : 02-Dec-2016

New Delhi, December 2: The government on Thursday clarified on the exemption limits for seizure of gold jewelry and ornaments as being 500 grams per married woman, 250 grams per unmarried woman and 100 grams per male member of the family. "Legitimate holding of jewelry up to any extent is fully protected. There is no limit on holding of gold jewelry or ornaments by anybody provided it is acquired from explained sources of income, including inheritance,” Finance Ministry said.
Amendments to the Income Tax laws do not seek to tax inherited gold and jewelry as also those items that are purchased through disclosed or agriculture income.

“The jewelry/gold purchased out of disclosed income or out of exempted income like agricultural income or out of reasonable household savings or legally inherited which has been acquired out of explained sources is neither chargeable to tax under the existing provisions nor under the proposed amended provisions,” the Central Board of Direct Taxes CBDT said.

Even if the gold does not match one's known income, "jewelry and ornaments to the extent of 500 gm for married lady, 250 gm for unmarried lady and 100 gm for male member will not be seized," the government said, producing portions of the 1995 law.

The Lok Sabha earlier this week passed the Taxation Laws (Second Amendment) Bill, which proposes that up to 85 percent tax and penalty on undisclosed wealth if discovered by tax authorities during search and seizure.

Dispelling rumors that jewelry would be covered under the amended law, the CBDT said the government has not introduced any new provision regarding chargeability of tax on jewelry. The Bill, which is currently under consideration of the Rajya Sabha, will amend Section 115BBE of the Income Tax Act to provide for a steep 60 percent tax and a 25 percent surcharge on it which is around 85 per cent for black money holders.