Important Topics: Gold Monetisation Scheme
In the Union Budget 2018-19 It was said that the government would formulate a comprehensive Gold Policy to develop the precious metal as an asset class. Gold Monetisation Scheme would also be revamped to enable people to open a hassle-free Gold Deposit Account.
The government will also establish a consumer friendly and trade efficient system of regulated gold exchanges in the country.
After this, the sourcing of metal by a trader in rural India will be easy and viable. This rural sector covers over 65 per cent of the Indian gold consumption.
The Gold Monetisation Scheme was introduced by the Central Government in the Union Budget 2015-16. The objective was to simultaneously safeguard the gold held in Indian households as well as put it to productive use. The larger objective was to cut down the country’s gold imports by decreasing domestic demand. India, incidentally, is the second-largest consumer of gold after China.
Following are the salient features of Gold Monetisation Scheme:
Easy storage of gold: The Scheme offers security to gold by not only storing it but also returning it to the owner in the form of money or physical gold when the plan attains maturity.
Utility for Idle gold: The Gold Monetisation Scheme will not only earn interest money, but also offers the option of encashing the gold at maturity which gives advantage of the appreciating value of gold.
Deposit Flexibility: Gold in any form like ornaments, Jewellery, coins or gold bars can be deoposited under the Gold Monetisation Scheme.
Flexibility in Quantity: The Minimum deposit that can be made in a gold monetization scheme is 30 grams of any purity. There is no maximum limit.
Convenient tenures: There are 3 term deposit plans available under the Gold Monetisation Scheme, which includes short term tenure of 1 to 3 years.
Attractive interest rates: For a product that usually remains idle in homes and lockers, the precious metal will earn between 0.5 per cent to 2.5 per cent interest depending on the period of deposit. Short-term deposit rates are decided by the banks concerned, while the medium and long-term deposit interest rates are decided by the Central Government.
Tax Benefits: Capital gains tax on the profits made through the Gold Monetisation Scheme has been exempted. The capital gains are also exempt from wealth tax and income tax.