Income earned from Gold Monetization Scheme are eligible for Tax exemption

Q. Hi I am Nikita, working as a Manager in a Private Ltd. Company. Recently, I have heard about the Gold Monetization Scheme announced by the Central Government last year. I want to know more about the scheme, especially its tax benefits. ~~Nikita Arora

A. Hi Nikita. Gold Monetization Scheme was launched by the Central Government last year with an object to mobilize idle gold lying in household, reduce the country’s dependence on gold imports and thereby reduce the CAD. You can invest any form of gold, i.e, bullion, jewellery, bars etc for a specific period. After the expiry of the scheme, you can receive interest from such deposit from the bank account which is linked with the scheme and the principal will be denominated in gold. The minimum amount of gold you can invest in this scheme is 30 gms.

The scheme has many benefits. The scheme earns interest for your gold jewellery lying in your locker apart from the appreciation of value. Further, your gold will be safe in the bank. The earnings are exempt from capital gains tax and income tax. There will be no capital gains tax on the appreciation in the value of gold deposited, or on the interest you make from it.

Q. I am Asad. I am a Teacher. Recently, I have gifted Rs. 3 Lakhs to my daughter on her marriage. She invested it in share market. I would like to know that upon whom the income tax liability will arise on the occasion of sale of such shares. ~~Asad Qureshi, Bhopal

A. Hi Asad. An individual, who receives any amount of money which exceeds Rs. 50,000/- from any person, without consideration, during a financial year is chargeable to income tax under the head “Income from Other Sources.”However, money received from relatives such as from father etc. are exempted from tax liability under this provision. Hence, your daughter will not have to pay income tax for the gift received from you. In this respect, you can examine the documentation or registration and applicability of stamp duty with respect to the said transaction. If the shares are sold, the capital gains tax arise from that transaction will be chargeable from the hands of your daughter.

Q. I am a Government Employee. I am planning to purchase a Life Insurance Policy. I want to know my tax liabilities at the time of expiry of my policy. ~~Ankit Sharma, New Delhi

A. Good question Ankit. You can claim deduction u/s 80C for the premium amount paid by you towards the Life Insurance Policy subject to an over-all cap of 1.5 Lakh p.a. the benefit of said provision can be claimed towards payment of insurance premium for self, spouse and children subject to the above condition. Further, the entire amount of money received by you on expiry of the said policy is exempted u/s 10 of the Income Tax Act, 1961.