Ever since the government has released a fresh notification on taxing gold, people fearing prosecution from the Income Tax department are flocking to their family jewellers to get the bills made for their old and unaccounted gold jewellery, which they may have received as gifts or ancestral wealth.

Jay Acharya (name changed), a cycle manufacturer in Ahmedabad, Gujarat said, “We understand the good intentions of the government in wanting to make people disclose their gold assets. But it is unfair to prosecute people because they could not give the bill for the gold jewellery they had. India is a country with a rich gold tradition. It is a standard practice to gift gold to close family members and friends. Now who can give you a bill for the gift they received? That is absurd.”

G.V. Sreedhar, chairman of the All India Gems and Jewelry Trade Federation, told The Sunday Guardian that the recent notification put out by the Finance Ministry prescribing the amount of gold a person can hold is not new. “This law was always there, it is just that the Ministry has brought it out in the open and made clarification on the notification. However, there is no limit on the holdings of gold one can have, it is only that the gold one has, needs to be accounted for with proper documentations.”

Sreedhar also mentioned that the notification had earlier brought some sort of fear amongst the people that their gold could be confiscated, and since then people have been flocking to their family jewellers to get their bills made.

“The government wants accountability from the people as to where and how did they buy the jewellery to check on the black component that operates in the market. Thus, every person having gold should maintain proper books of their possessions,” he added.

Sreedhar said that India has a culture of gifting gold in marriages and other important functions, and it was not wise on the part of the government to expect that people will maintain proper accounts of gold they have received as gift.

Shivali D’Souza (name changed), a homemaker living in New Delhi, said, “We belong to the upper middle class segment of society. If I am to disclose the exact amount of gold I have in my possession then the tax collectors might feel that I am being dishonest. But the truth is that I was my parents’ only child and whatever they had in their possession they passed onto me. A large portion of the gold that my family possesses today is accumulated gold asset passed over for generations in the family. I am not sure how I will convince the government of that.”

Rudrajyoti Banerjee, regional manager (East) of the All India Gems and Jewellery Trade Federation, said that the lower middle class and the middle class have not been affected by this notification because they do not have much gold. He said that if a person holding gold has proper documentation there is no fear at all. He should be able to validate whenever questions are raised.

Ashmit (name changed) said, “We can start maintaining records of whatever we buy now, knowing that it will help us stay away from any legal issues. But how am I supposed to give account of the jewellery that my wife got made years ago after melting some gold coins that we had received as a wedding gift. It is impractical. Indians love gold. Anybody who can afford prefers to invest in gold. If the government wants transparency, they will have to come up with a better plan.”

 

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