The one-of-a-kind book on Gold & Taxes is the first book in this domain, written in simple & lucid language along-with plenty of examples, case studies & tables. Any person being a buyer, seller, the investor would not like to face a heavy tax burden, while fondly handling the shining, yellow gold. This book provides complete guidance on how to save taxes on gold, and the law stated in this book is amended up to 25th November 2020. Key features of this book are as follows: · It encompasses all aspects of Income-tax · Relevant GST principles such as composition scheme, Input tax credit, have also been incorporated · Examples, cases, and tables for easy understanding · Tips at the end of various chapter · The contents of this book are as follows: o How much gold can you hold? o Search, seizure & income tax o Digital search o Gold monetization scheme o Sovereign gold bonds o Undisclosed & unexplained gold o Gold ETF o Gold coins o Capital gains tax o Valuation of gold o Traders & gold o Inheriting gold o Gold & silver utensils o Stridhan o Gold & GST o Gold & gold traders o Appendices § Historical Gold & Silver Rates § Cost Inflation Index for Gold Sold after 1-4-2017, notified by CBDT on 5-6-2017 for the financial year 2001-02 and subsequent years § GST Tariff § GST forms for gold traders § GST for automatically generated after filing form

1. Sample
Read

2. © Taxmann
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3. Preface
India was once known as “sone ki chidiya” for
she could buy the gold of the entire world. Today,
also India is the biggest consumer of gold in the
international arena.
“Money is gold, and nothing else” said world-famous
financier J.P. Morgan. This shows the importance of
the glittering metal. “Gold will be around. Gold will be
money when the dollar and the Euro and the Yuan
and the Ringgit are mere memories” said financial
analyst Richard Russell.
This book is about how to save taxes, on gold. Whether
you are a buyer, seller, investor, you would not like
to face heavy tax burden, while fondly handling
the shining, yellow gold. The book encompasses all
aspects of gold and income-tax. The “baby” GST has
also been covered.
I wish to offer my thanks to TAXMANN, who has given
me the opportunity to write a book for the largest tax
publishing house in the country. I thank my parents,
who encouraged me by saying “Well done” when each
success came in life. I thank my elder brother, who
was also in civil services, for encouragement.
I-7

4. This is the first book on Gold and Taxes, which
has been written, in the country. It’s simple, full of
examples, cases and tables. The book would bring
shine to your bookshelf. My fond hope is that India
becomes jeweller to the world !
MEENAKSHI SUBRAMANIAM
P R E F A C E
I-8

5. 1
HOW MUCH GOLD CAN YOU HOLD
1.1 Introduction 1
1.2 CBDT Instruction No. 1916, dated 11-5-1994 1
1.3 Application of Instruction No. 1916 to assessment ? 3
1.4 Some Case Studies 3
1.4-1 Gold found in limit to be treated as explained 3
1.4-2 Relaxation to be allowed from seizure and not
from treating them unexplained 6
1.5 Broader Implications 9
2
SEARCH, SEIZURE & INCOME-TAX
2.1 Introduction 11
2.2 Appreciation in value cannot be a subject matter of
addition 11
2.3 Search and Seizure Operations 13
I-11
PAGE
About the Author I-5
Preface I-7
Chapter-heads I-9
Introduction I-19
Contents

6. PAGE
2.4 Powers of Assessing Officer 15
2.5 Case Studies 16
2.5-1 Application of mind 16
2.5-2 Survey Converted to search 17
2.5-3 Other Case Laws 17
2.6 Penalty in cases of search 19
2.7 Frequently asked questions 20
2.8 Documents to substantiate the holding 22
3
DIGITAL SEARCH
3.1 Introduction 23
3.2 Relevant provisions of Income-tax Act 23
3.2-1 Section 2 23
3.2-2 Section 132 24
3.2-3 Section 282 24
3.3 Two digital evidence cases 25
3.3-1 Case One 25
3.3-2 Case Two 26
4
GOLD MONETIZATION SCHEME
4.1 Introduction 28
4.2 Benefits 28
4.3 Objectives 29
4.4 New relevant Income-tax provisions 29
4.5 The process 30
4.6 Tax advantages 31
4.7 Comparison between old & new scheme 33
C O N T E N T S
I-12

7. PAGE
5
SOVEREIGN GOLD BONDS
5.1 Introduction 35
5.2 Why Sovereign Gold Bonds were issued 35
5.3 GST Scare? Sovereign Gold Bonds to rescue 36
5.4 Buying the bond 36
5.5 Tax advantages 36
5.5-1 How redemption helps taxpayer? 37
5.5-2 How indexation helps taxpayer? 37
5.5-3 How there is no TDS? 38
5.6 Tax disadvantages 38
5.6-1 Interest is taxable 38
5.6-2 Selling in secondary market invites tax 38
5.7 Tips 39
6
UNDISCLOSED & UNEXPLAINED GOLD
6.1 Introduction 41
6.2 Section 69A 41
6.3 Section 69B 42
6.4 Some facts about section 69A & section 69B 42
6.5 Case law 44
6.5-1 Section 69A cases 44
6.5-2 Section 69B cases 45
6.6 Penalty 45
6.6-1 Penalty for unexplained income - Section
271AAC 45
6.6-2 Penalty - Search & undisclosed jewellery 48
6.7 Case law 48
6.8 Immunity from penalty 50
I-13
C O N T E N T S

8. PAGE
7
GOLD ETF
7.1 Introduction 51
7.2 Taxation of Gold ETF’s 51
7.3 Gold ETF’s tax drawback 52
7.4 Comparison with Sovereign Gold Bonds 53
7.5 Tips for Gold ETF’s 54
8
GOLD COINS
8.1 Introduction 56
8.2 Taxation of gift of gold coins 56
8.3 Taxation of capital gains from gold coins 57
8.4 How to save tax on gold & silver coins 57
8.5 Case law 58
8.6 Are gold coins seized, if quantity is okay 59
8.7 Two sides of same coin 60
9
CAPITAL GAINS TAX
9.1 Introduction 63
9.2 Short-term capital gains tax on gold 63
9.3 Long-term capital gains tax on gold 64
9.4 Benefits of indexation 64
9.5 Fair Market Value (FMV) 65
9.6 Deductible expenses 66
9.7 Tax exemptions 67
9.7-1 Section 54EE 67
C O N T E N T S
I-14

9. PAGE
9.7-2 Section 54F 67
9.8 Personal effects 68
9.9 Case law 70
9.9-1 HUF use is also personal 70
9.9-2 No need to prove owned gold, to sell it 71
9.10 Gold sale or undisclosed income ? 72
9.11 Diamonds studded in gold jewellery 72
10
VALUATION OF GOLD
10.1 Introduction 74
10.2 When is valuation done? 75
10.2-1 Section 55A 75
10.2-2 Section 142A 76
10.3 Stones valuation is not required every year 77
10.4 Board circular 77
10.5 What about precious stones ? 78
10.6 Case law 79
10.6-1 Avoid mistakes in gold valuation 79
10.7 Tips 82
11
TRADERS & GOLD
11.1 Introduction 90
11.2 Books of account 91
11.3 Cases 92
11.3-1 How to keep accounts? 92
I-15
C O N T E N T S

10. PAGE
12
INHERITING GOLD
12.1 Introduction 100
12.2 Changing base year has benefited assessee 101
12.3 Case Laws 102
12.3-1 AO is not handwriting expert 102
12.3-2 Joint family gave gold ornaments 102
12.3-3 Inherited jewellery may not appear in
balance sheet 103
12.3-4 Polishing proved inherited jewellery 103
12.3-5 Status of family has to be considered 103
12.3-6 Baseless reasoning 104
12.3-7 Family settlement is equal to inheritance 104
12.3-8 Cases in favour of revenue 104
12.4 Ways to prove gold is inherited 106
13
GOLD & SILVER UTENSILS
13.1 Introduction 107
13.2 Utensils must be personal effects, to avoid tax 109
13.3 Utensils must be reasonable in number 110
13.4 Daily use may be waived off 110
13.5 CBDT instruction covers utensils 112
13.6 Where gold & silver utensils were not spared 112
13.7 Tips 113
14
STRIDHAN
14.1 Introduction 115
14.2 Stri’s dhan 115
C O N T E N T S
I-16

11. PAGE
14.3 What stridhan consists of? 117
14.4 How does income-tax treat stridhan? 117
14.5 Where stridhan case was lost? 120
14.6 CBDT instruction does not hit stridhan 121
15
GOLD & GST
15.1 Introduction 123
15.2 Previous taxes axed 123
15.3 GST on gold making charges 124
15.4 When customer sells gold jewellery 125
15.5 Exchange of jewellery & GST 126
15.6 Repair of jewellery & GST 126
15.7 Karigar charge & GST 126
15.8 Gifts alongwith jewellery & GST 126
15.9 Jewellery or watch 127
15.10 GST, traders & cases 128
16
GST & GOLD TRADERS
16.1 Introduction 132
16.2 A big tax reform 132
16.3 Gold trader registration 133
16.4 Relevant GST principles 134
16.4-1 Supply 135
16.4-2 Composition scheme 135
16.4-3 Input Tax Credit (ITC) 135
16.4-4 Reverse charge 136
16.4-5 Job worker services 136
16.5 Import incentives 137
I-17
C O N T E N T S

12. PAGE
16.6 Some more GST & gold facts 138
16.6-1 HSN Meaning 138
16.6-2 Gold Price & GST 138
16.6-3 Instalment Schemes 139
16.6-4 Material and Labour 139
16.6-5 Exchange 139
16.6-6 Hallmarking charges 139
16.7 Registered customer 140
16.7-1 Where both are important supplies 140
16.7-2 Place 140
16.7-3 Input Tax Credit & goods given to job worker 141
16.7-4 No TDS 141
16.7-5 Free gifts 141
16.7-6 Copper added 141
16.7-7 GST refund 142
16.7-8 Transitional provisions 142
16.7-9 Anti-Profiteering 142
16.7-10 Wastage allowance 142
16.8 Jewellery bag and jewellery box and GST 143
16.8-1 Jewellery box 143
APPENDICES
Appendix 1 : Historical Gold and Silver Rates 147
Appendix 2 : Cost Inflation Index for Gold Sold after
1-4-2017, notified by CBDT on 5-6-2017
for financial year 2001-02 and subsequent
years 149
Appendix 3 : GST Tariff 150
Appendix 4 : u GST forms for Gold traders 161
u GST forms automatically generated after
filling form 163
C O N T E N T S
I-18

13. Sample Chapter
5.1 INTRODUCTION
O n e m a n s a i d : ‘ I w a n t t o g o t h e B o n d w a y . ”
H i s f r i e n d e x c l a i m e d : “ W h a t ! ”
T h e m a n s a i d ; “ R e l a x , I w a n t t o b u y S o v e r e i g n G o l d B o n d s . ”
S o v e r e i g n G o l d B o n d s a r e t h e o n l y g o l d p o s s e s s i o n , w h i c h p a y y o u ,
i n s t e a d o f y o u r p a y i n g f o r t h e m . T h e y a r e g o v e r n m e n t s e c u r i t i e s
d e n o m i n a t e d i n g r a m s o f g o l d . O n e g r a m i s e q u a l t o o n e b o n d .
T h e s e g o l d b o n d s a r e n o w - a - d a y s u s e d a s a s u b s t i t u t e f o r h o l d i n g
p h y s i c a l g o l d . T h o s e w h o s u b s c r i b e t o t h e b o n d s a r e r e q u i r e d t o
p a y t h e i s s u e p r i c e i n c a s h ; t h e b o n d s w i l l b e r e d e e m e d i n c a s h o n
m a t u r i t y . T h e b o n d i s i s s u e d b y R e s e r v e B a n k o f I n d i a o n b e h a l f
o f t h e G o v e r n m e n t o f I n d i a f r o m t i m e t o t i m e . A n d , n o p h y s i c a l
e x c h a n g e o f g o l d w o u l d a c t u a l l y b e m a d e .
5.2 WHY SOVEREIGN GOLD BONDS WERE ISSUED?
T h e G o v e r n m e n t o f I n d i a a n n o u n c e d t h e S o v e r e i g n G o l d B o n d
S c h e m e , 2 0 1 5 , w i t h t h e a i m o f r e d u c i n g t h e d e m a n d f o r p h y s i c a l
g o l d s o a s t o r e d u c e t h e o u t f l o w o f f o r e i g n e x c h a n g e o n a c c o u n t
o f i m p o r t o f t h i s p r e c i o u s m e t a l .
F a c t o r s f o r i n t r o d u c i n g S c h e m e :
u
T h e d e m a n d f o r g o l d i n I n d i a g o e s u p i n t i m e s o f u n c e r t a i n t y
o r h i g h i n f l a t i o n .
u
G o l d d e m a n d i s m o s t l y m e t t h r o u g h c o u n t r y ’ s i m p o r t s f r o m
S w i t z e r l a n d , H o n g K o n g , S o u t h A f r i c a , G h a n a , t h e D o m i n
-i c a n R e p u b l i c , U z b e k i s t a n , T a n z a n i a , S u d a n , L e b a n o n a n d
S u r i n a m .
Sovereign
Gold Bonds
5
C H A P T E R
35

14. u
Y e a r s o f h i g h i m p o r t s a r e o n e s o f t h e r e a s o n s f o r h i g h c u r r e n t
a c c o u n t d e f i c i t w h i c h , i n t u r n , h a v e w e a k e n e d t h e r u p e e .
5.3 GST SCARE ? SOVEREIGN GOLD BONDS TO RESCUE
D o y o u k n o w t h e b i g g e s t a d v a n t a g e o f S o v e r e i g n G o l d B o n d s ? T h e y
d o n o t c o m e u n d e r G S T t a x a t i o n . A f t e r G S T e n t r y , t h e S o v e r e i g n
G o l d B o n d w o u l d b e p r o f i t a b l e , o v e r p h y s i c a l g o l d , c o i n s o r b a r s .
H o w e v e r , i n c a s e o f g o l d c o i n s a n d b a r s , e a r l i e r t h e V A T w a s a t 1 %
t o 1 . 2 % , w h i c h h a s n o w b e e n r a i s e d t o 3 % .
5.4 BUYING THE BOND
Y o u c a n b u y a s l i t t l e a s 1 g m . o f g o l d u n d e r t h e G o l d S o v e r e i g n B o n d
S c h e m e . T h e m a x i m u m l i m i t i s 4 k g . f o r a n i n d i v i d u a l , n o w a n d 2 0
k g . f o r a t r u s t . A n y b o d y w h o i s a r e s i d e n t o f I n d i a c a n i n v e s t i n t h e
s c h e m e . C o r p o r a t e s a n d c o m p a n i e s , H U F s a n d p a r t n e r s h i p f i r m s
a r e a l l a l l o w e d t o b u y t h e b o n d s . P A N c a r d d e t a i l s a r e m a n d a t o r y .
T h e r e a r e t h r e e b i g p l u s p o i n t s o f S o v e r e i g n G o l d B o n d S c h e m e ,
c o m p a r e d t o p h y s i c a l g o l d . O n e c a n b u y g o l d a t a c h e a p e r p r i c e ,
c o m p a r e d t o m a r k e t p r i c e . F o r e x a m p l e , i f t h e p r i c e o f 1 0 g r a m g o l d
i s
`
3 9 0 0 i n o p e n m a r k e t , t h e s c h e m e m a y o f f e r g o l d a t
`
3 7 9 5 , o n l y .
T h e o t h e r g a i n i s t h a t i n s t e a d o f t h e g o l d l y i n g i d l e , i t p a y s i n t e r e s t .
T h e r a t e o f i n t e r e s t i s 2 . 5 % , a t h a l f - y e a r l y r e s t s .
T h o u g h i n t e r e s t i s t a x a b l e , t h e r e i s a s o v e r e i g n g u a r a n t e e o n t h e
s a m e i n t e r e s t f r o m S o v e r e i g n G o l d B o n d s , w h i c h i s a p l u s f a c t o r .
5.5 TAX ADVANTAGES
T h e r e a r e t w o m a j o r a d v a n t a g e s o f S o v e r e i g n G o l d B o n d S c h e m e ,
o n e r e d e m p t i o n i s n o t t a x e d a n d t w o , i n d e x a t i o n b e n e f i t i s g i v e n .
T o e n s u r e t h a t S o v e r e i g n G o l d B o n d S c h e m e s c o r e s h e a v i l y o n
t a x f r o n t , t h e g o v e r n m e n t h a s b r o u g h t i n t w o i n c o m e t a x a m e n d
-m e n t s , w h i c h p a v e w a y f o r r e d e m p t i o n a n d i n d e x a t i o n m e a s u r e s ,
m e n t i o n e d a b o v e .
Finance Act, 2016 has inserted a new clause, section 47
( v i i c )
under
which redemption of Sovereign Gold Bonds
i s s u e d b y t h e R e s e r v e
B a n k o f I n d i a u n d e r t h e S o v e r e i g n G o l d B o n d S c h e m e , 2 0 1 5 , b y
a n a s s e s s e e b e i n g a n i n d i v i d u a l s h a l l n o t b e c o n s i d e r e d a s t r a n s f e r .
T h e r e s u l t i s t h a t t h e t r a n s a c t i o n s h a l l n o t b e r e g a r d e d a s t r a n s f e r
f o r p u r p o s e o f c a p i t a l g a i n s t a x .
Para 5.5
S O V E R E I G N G O L D B O N D S
36

15. S e c t i o n 4 8 h a s b e e n a m e n d e d t o p r o v i d e t h a t u n d e r t h i r d p r o v i s o ,
b e n e f i t o f i n d e x a t i o n s h a l l a p p l y t o l o n g - t e r m c a p i t a l g a i n s , a r i s i n g
f r o m t r a n s f e r o f S o v e r e i g n G o l d B o n d s . P r e v i o u s l y , i t w a s n o t
a v a i l a b l e t o b o n d s a n d d e b e n t u r e s , e x c e p t c a p i t a l i n d e x e d b o n d s
i s s u e d b y t h e G o v e r n m e n t . T h a t m e a n s , t h a t m o d e o f c o m p u t a t i o n
h a s b e e n a l t e r e d , t o g i v e a d v a n t a g e t o S o v e r e i g n G o l d B o n d s .
T h e s e a m e n d m e n t s w i l l t a k e e f f e c t f r o m 1 s t A p r i l , 2 0 1 7 a n d w i l l ,
a c c o r d i n g l y , a p p l y i n r e l a t i o n t o a s s e s s m e n t y e a r 2 0 1 7 - 2 0 1 8 a n d
s u b s e q u e n t y e a r s .
5.5-1 How redemption helps taxpayer?
T h e r e i s n o t a x o n t h e p r o c e e d s o f s o v e r e i g n g o l d b o n d a t t h e t i m e
o f r e d e m p t i o n . T h a t i s , t h e g o v e r n m e n t h a s e x e m p t e d r e d e m p t i o n
o f b o n d s a f t e r t h e m a t u r i t y p e r i o d a n d t h e w i t h d r a w a l h a s b e c o m e
c o m p l e t e l y t a x f r e e .
A f t e r t h e 5 t h y e a r o n w a r d s , y o u a r e e l i g i b l e t o r e d e e m t h e S o v e r e i g n
G o l d B o n d o n 6 t h , 7 t h a n d 8 t h y e a r ( l a s t y e a r ) . L e t u s a s s u m e a t
t h e t i m e o f i n v e s t m e n t , t h e b o n d p r i c e i s
`
3 , 5 0 0 a n d a t t h e t i m e o f
r e d e m p t i o n , t h e b o n d p r i c e i s
`
4 , 0 0 0 . T h e n y o u w i l l e n d u p w i t h a
p r o f i t o f
`
5 0 0 . T h i s c a p i t a l g a i n a r i s i n g d u e t o r e d e m p t i o n o f S o v
-e r e i g n G o l d B o n d b y a n i n d i v i d u a l i s e x e m p t f r o m t a x .
S i n c e t h e b o n d s a r e t a x f r e e n o l i a b i l i t y f o r T D S d e d u c t i o n a r i s e s
o v e r t h e s a m e .
H o w e v e r , i f t h e S o v e r e i g n G o l d B o n d s a r e t r a n s f e r r e d b e f o r e t h e
d a t e o f M a t u r i t y , t a x w i l l b e a p p l i c a b l e .
R e m e m b e r , t h e r e i s a l s o a s o v e r e i g n g u a r a n t e e o n t h e r e d e m p t i o n
m o n e y , w h i c h i s a m a j o r a d v a n t a g e o f s o v e r e i g n g o l d b o n d s .
5.5-2 How indexation helps taxpayer?
I f s o m e o n e w a n t s t o t r a n s f e r S o v e r e i g n G o l d B o n d s b e f o r e m a
-t u r i t y , t h e y c a n g e t i n d e x a t i o n b e n e f i t s . T h a t i s , i f y o u c h o o s e t o
s e l l b e f o r e m a t u r i t y o f e i g h t y e a r s , o r a f t e r h o l d i n g t h e m f o r t h r e e
y e a r s o r m o r e , t h e n g a i n s a r e t a x e d a s l o n g - t e r m c a p i t a l g a i n s a t a
r a t e o f 2 0 % , w i t h b e n e f i t s o f i n d e x a t i o n .
I f h e l d f o r l e s s t h a n t h r e e y e a r s , g a i n s a r e t a x e d a t t h e t a x s l a b o f
t h e s u b s c r i b e r .
37
T A X A D V A N T A G E S
Para 5.5

16. T h u s , y o u c a n c l a i m i n d e x a t i o n b e n e f i t s o n t h e l o n g - t e r m c a p i t a l
g a i n s a r i s i n g o n d e c i s i o n t o t r a n s f e r t h e b o n d .
5.5-3 How there is no TDS?
T h e r e i s n o c o n c e p t o f T D S . S i n c e t h e b o n d s a r e t a x f r e e n o l i a b i l
-i t y f o r T D S d e d u c t i o n a t a l l a r i s e s o v e r t h e s a m e . H e n c e , i t i s j u s t
r e s p o n s i b i l i t y o f i n v e s t o r s t o p a y t h e t a x a s p e r t h e r u l e s .
5.6 TAX DISADVANTAGES
5.6-1 Interest is taxable
TheinterestIncomeistaxed,underGoldBondScheme.
G o l d b o n d s
p a y i n t e r e s t a t t h e r a t e o f 2 . 5 0 % p e r a n n u m t o a s u b s c r i b e r o n a m o u n t
o f i n i t i a l i n v e s t m e n t . T h i s i n t e r e s t i s c r e d i t e d s e m i - a n n u a l l y t o t h e
b a n k a c c o u n t o f t h e i n v e s t o r . B u t , i n t e r e s t o n t h e B o n d s w i l l b e
t a x a b l e a s p e r t h e p r o v i s i o n s o f t h e I n c o m e - t a x A c t , 1 9 6 1 ( S e c t i o n
4 3 ) , w h i c h m e a n s t h a t s e m i - a n n u a l i n t e r e s t i n c o m e d e r i v e d f r o m
S o v e r e i g n G o l d B o n d s w i l l b e f u l l y t a x a b l e i n c o m e f o r y o u .
T h i s i n c o m e h a s t o b e s h o w n u n d e r t h e h e a d o f “ I n c o m e f r o m o t h
-e r s o u r c e s ” a n d y o u w o u l d h a v e t o p a y t h e t a x a c c o r d i n g l y . T h a t
m e a n s , i n c o m e t a x w o u l d h a v e t o b e g i v e n t o g o v e r n m e n t , j u s t l i k e
i n c a s e o f y o u r B a n k F i x e d D e p o s i t s .
5.6-2 Selling in secondary market invites tax
T h i s i s o n e m o r e w a y , i n w h i c h t a x a t i o n m a y h i t a p e r s o n . L e t u s
a s s u m e y o u b u y t o d a y t h e S o v e r e i g n G o l d B o n d I s s u e a n d s e l l i t
i n s t o c k e x c h a n g e a f t e r a y e a r o r s o . I n s u c h a s i t u a t i o n , a n y p r o f i t
o r l o s s f r o m s u c h a t r a n s a c t i o n w o u l d b e i m m e d i a t e l y c o n s i d e r e d
a s c a p i t a l g a i n .
H e n c e , i f t h e s e b o n d s a r e s o l d i n t h e s e c o n d a r y m a r k e t b e f o r e
m a t u r i t y , t h e r e a r e t w o s c e n a r i o s :
Before 3 years
- I f y o u s e l l t h e b o n d s w i t h i n t h r e e y e a r s a n d i f t h e r e
i s a n y c a p i t a l g a i n , s u c h c a p i t a l g a i n w i l l b e t a x e d a s p e r y o u r i n
-c o m e t a x s l a b .
After 3 years
- I f y o u s e l l t h e b o n d s a f t e r 3 y e a r s b u t b e f o r e m a t u r i t y ,
t h e c a p i t a l g a i n w i l l b e t a x e d a t 2 0 % w i t h i n d e x a t i o n .
Para 5.6
S O V E R E I G N G O L D B O N D S
38

17. 5.7 TIPS
u
A m i n o r c a n a p p l y f o r S o v e r e i g n G o l d B o n d s c h e m e t h o u g h
h i s / h e r g u a r d i a n .
u
N o t o n e m e m b e r , b u t e a c h m e m b e r o f f a m i l y c a n b u y t h e
b o n d s i n h i s / h e r o w n n a m e i f t h e y s a t i s f y t h e e l i g i b i l i t y c r i
-t e r i a a s d e f i n e d .
u
Y o u c a n b u y e v e r y y e a r , t o o . F o r e x a m p l e , a n i n d i v i d u a l /
t r u s t c a n b u y 4 K g . / 2 0 K g . w o r t h o f g o l d e v e r y y e a r a s t h e
c e i l i n g h a s b e e n f i x e d o n a f i s c a l y e a r ( A p r i l - M a r c h ) b a s i s .
u
J o i n t h o l d i n g c a n b e d o n e t o o , i n c a s e o f g o l d b o n d s .
u
T h o u g h a N R I c a n ’ t b u y b o n d s , h e c a n b e n o m i n e e a n d a s a
r e s u l t c a n g e t S o v e r e i g n G o l d B o n d t r a n s f e r r e d i n h i s o w n
n a m e . H o w e v e r , t h e r e a r e t w o t h i n g s , w h i c h h e m u s t k e e p i n
m i n d . T h e N R I i n v e s t o r , t o g e t t a x a d v a n t a g e w i l l b e r e q u i r e d
t o h o l d t h e s e c u r i t y t i l l e a r l y r e d e m p t i o n o r t i l l m a t u r i t y . T h e
i n t e r e s t a m o u n t a n d m a t u r i t y p r o c e e d s o f t h e S o v e r e i g n G o l d
B o n d s i n v e s t m e n t w i l l n o t b e r e p a t r i a b l e .
u
S G B c a n b e g i f t e d t o a r e l a t i v e o r f r i e n d , i f t h e y f u l f i l e l i
-g i b i l i t y c r i t e r i a . T h e t r a n s f e r p r o c e d u r e i s g o v e r n e d b y t h e
p r o v i s i o n s o f t h e G o v e r n m e n t S e c u r i t i e s A c t , 2 0 0 6 a n d t h e
G o v e r n m e n t S e c u r i t i e s R e g u l a t i o n s , 2 0 0 7 , b e f o r e m a t u r i t y .
I t s h a l l b e d o n e b y e x e c u t i o n o f a n i n s t r u m e n t o f t r a n s f e r ,
w h i c h i s a v a i l a b l e w i t h t h e i s s u i n g a g e n t s .
T A B L E
INVESTMENT COMPARISON - SGB, PHYSICAL GOLD & ETF
W h a t h a p p e n s w h e n w e i n v e s t t h e s a m e a m o u n t i n t h r e e d i f f e r e n t
t y p e s , n a m e l y . P h y s i c a l G o l d , S G B a n d G o l d E T F ? S t u d y t h i s t a b l e :
I n v e s t m e n t a m o u n t -
`
1 , 0 0 , 0 0 0
I n v e s t m e n t H o r i z o n - 1 y e a r
A n n u a l a p p r e c i a t i o n i n G o l d P r i c e - 1 0 % [ A s s u m e d ]
A v e r a g e I n f l a t i o n - 5 % f o r t h e 5 y e a r p e r i o d [ A s s u m e d ]
I n d i v i d u a l t a x s l a b - 1 0 % [ A s s u m e d ]
Horizon Items Physical Gold SGB Gold ETF
1 Y e a r G o l d I n v e s t m e n t 1 , 1 0 , 0 0 0 1 , 1 0 , 0 0 0 1 , 1 0 , 0 0 0
C o s t o f A c q u i s i t i o n 1 , 0 0 , 0 0 0 1 , 0 0 , 0 0 0 1 , 0 0 , 0 0 0
39
T I P S
Para 5.7

18. Horizon Items Physical Gold SGB Gold ETF
P r o fi t 1 0 , 0 0 0 1 0 , 0 0 0 1 0 , 0 0 0
T a x @ 1 0 % 1 , 0 0 0 0 * 1 , 0 0 0
I n t e r e s t I n c o m e — 2 , 5 0 0 —
T a x o n I n t e r e s t @ 1 0 % — 0 —
T o t a l I n c o m e 1 0 , 0 0 0 1 2 , 5 0 0 1 0 , 0 0 0
T o t a l T a x 1 , 0 0 0 0 1 , 0 0 0
N e t P r o fi t 9 , 0 0 0 1 2 , 5 0 0 9 , 0 0 0
* N o t a x h a s b e e n c a l c u l a t e d f o r S G B a s s u m i n g t h e y h a v e b e e n s o l d a f t e r
c o m p l e t i o n o f t e n u r e .
Para 5.7
S O V E R E I G N G O L D B O N D S
40

19. GOLD & TAXATION
Author : Meenakshi Subramaniam
Edition : 2020 Edition
ISBN No : 9788194924654
Rs. 525 USD 20
Date of Publication : December 2020
Weight (Kgs) : 0.15
No. of papers : 184
ORDER NOW
Description
The one of a kind book on Gold & Taxes, is the first book in this domain, written
in simple & lucid language along-with plenty of examples, case studies & tables.
Any person being a buyer, seller, investor would not like to face heavy tax
burden, while fondly handling the shining, yellow gold. This book provides a
complete guidance on how to save taxes on gold, and law stated in this book is
amended up to 25th November 2020. Key features of this book are as follows:
u It encompasses all aspects of Income-tax
u Relevant GST principles such as composition scheme, Input tax credit,
have also been incorporated
u Examples, cases and tables for easy understanding
u Tips at the end of various chapter
u The contents of this book are as follows:
n How much gold can you hold?
n Search, seizure & income tax
n Gold & gold traders
n Appendices
l Historical Gold & Silver Rates
l Cost Inflation Index for Gold Sold after 1-4-2017, notified by
CBDT on 5-6-2017 for financial year 2001-02 and subsequent
years