No cap on gold if source mentioned

KOLKATA: The guidelines on gold jewellery by Central Board of Direct Taxes has led to confusion galore over how much of the yellow metal one can possess without being penalized. The rule clarifies that there is no cap on the gold one can possess, provided the source is established.
While income tax officials remained tight-lipped about the nuances, jewellers said it was merely a reiteration of a CBDT instruction in 1994.The 1994 norms by CBDT said a married woman could have —at home or locker—up to 500g gold, an unmarried woman 250g and a male member 100g.
Income tax advocate Sanjay Tiwari said the government kept the wealth declaration window open till March 2015. “Those who have declared their inherited gold by that time will not be affected. But the others will come under the CBDT rules,” Tiwari said. “Going by the 1994 circular, which was reiterated on Thursday by the CBDT, a family of four, comprising a son and a daughter, is allowed to keep 950g gold.” If the family possesses 2,000g gold, they will have to provide supporting documents, such as receipts, for the remaining 1,050g gold.
An income tax official clarified inherited ornaments would be included within the CBDT limits. “If a family has more gold, they will have to explain the source if asked,” he said, adding the person can mention the excess amount in I-T returns. CBDT rules also clarified there was no limits to holding gold jewellery provided the sources are established. “These were all mentioned in the 1994 guidelines. There has not been any change,” said Pankaj Parekh, former chairman (east) of Gem and Jewellery Export Promotion Council.
“Buyers are also confused about the gold they receive during weddings or other functions. In most cases, gifts do not accompany a receipt,” said Rupak Saha, an All India Gem and Jewellery Federation member. An income tax department officer clarified the person will have to keep a record of the ornaments s/he received as gift. If required, the officials can cross-check with the giver who will have to produce supporting documents, such as receipts, for the “gift”. If officials are satisfied with the explanation and documents, the person will be given a clean chit. Otherwise, the person will have to pay a gift tax and penalty.
Jewellers in Kolkata have witnessed a spurt in gold purchase through net-banking. “Earlier, people used cheques or credit cards, if not cash. Now, 10-15% payments are being done through net-banking,” said Suvankar Sen, executive director of Senco Gold & Diamonds.