Is your gold under threat from new IT act? Know here

 

The Lok Sabha passed the Taxation Laws (Second Amendment) Bill, which proposes a steep up to 85% tax and penalty on undisclosed wealth that is discovered by tax authorities during search and seizure.

 

This amendment does not seek to tax inherited gold and jewellery as also those items that are purchased through disclosed or agriculture income, the government said.

 

Dispelling rumours that jewellery would be covered under the amended law, the Central Board of Direct Taxes (CBDT) said the government has not introduced any new provision regarding changeability of tax on jewellery.

 

Here is what CBDT further said about gold:

 

1. The jewellery/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.

 

2. During search operations, conducted by I-T Department, there would be no seizure of gold jewellery and ornaments to the extent of 500 grams per married women, 250 gm per unmarried women as also 100 gm per male member of the family, it said.

 

3. Legitimate holding of jewellery up to any extent is fully protected.

 

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% tax and a 25% surcharge on it (total 75%) for black money holders.

 

Another section inserted provides for an additional 10% penalty on being established that the undeclared wealth is unaccounted or black money, taking the total incidence of levies to 85%.
  

CBDT said: "Tax rate under section 115BBE is proposed to be increased only for unexplained income as there were reports that the tax evaders are trying to include their undisclosed income in the return of income as business income or income from other sources.
    

"The provisions of section 115BBE apply mainly in those cases where assets or cash etc. are sought to be declared as 'unexplained cash or asset' or where it is hidden as unsubstantiated business income, and the Assessing Officer detects it as such."