OUR VIEW: SHOULD YOU GO IN FOR THE GOLD AMNESTY SCHEME

Insignia Consultants

New Delhi

Thursday, October 31, 2019

TIME 7:45 AM IST                       

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Should you go in for the gold amnesty scheme

The proposed scheme
According to media, the new amnesty scheme would allow gold hoarders to come clean on investment made using black money by declaring their possession and paying tax on it. The tax will have to be paid on entire value of gold declared by an individual that has been purchased without any receipt.
Though the rate of tax is yet to be worked out by the government, sources indicated that the thinking is to keep the rate at around 30 per cent level with an effective rate of around 33 per cent including education cess.
MY VIEW: The cons
Every scheme by the NDA/Modi government causes hardship to the common man. Common man is considered anti national by NDA/Modi government. Be it the GST or the demonetization scheme, the aam aadmi has felt cheated. Demonetization has been failure. GST caused massive hardship to the small and medium sized business for the first eighteen months.
I just hope that the scheme is not forced seizure of gold. Taxman and other law enforcement agencies do not chase people to declare. Rural India and urban Indian both have inherited gold. Inherited gold should not be taxed.
Gold brought by a self-earned income should be considered whether the same is from black money or not. Gold gifting is a tradition in India. People should be given adequate time to prove that gold and gold jewelry has been gifted.
Hindu, sikh, jain and religious institutions should be exempt. As a staunch Hindu, I believe that the state should not control our temples. (just like church is controlled by the Vatican. A rapist bishop goes not scot free due to Vatican control over Church). Gold in temples and gurudwara should not be seized or subject to any kind of tax. As a Hindu, I believe that NDA/Modi government has failed to protect our religious interest and religious culture.
Farmers and rural people who are less educated should not be harassed also. Even a person living in a jhuggi jhopri owns some form of gold.
The positives
Gold import will be virtually zero. Foreign exchange outflows will be zero. But every gram purchased and sold will be tracked in future.
Sarkari bribe takers and ghoos khoor’s (in my view) invest in gold and real estate. In demonetization, very few were caught. I just hope that current sarkari babus and retired sarkari babus are caught by the law enforcement.
I also hope that the scheme does not give amnesty of gold hoarding by political parties and political leaders. Demonetization gave amnesty to political parties.
The lakh rupee question: Should you voluntary declare the gold purchased by you. This is case of personal preference. Let the scheme out and then I will give my view. However in case you own very large quantities of gold brought by your own income which has been brought by undeclared income, then you should surely go for it.
To conclude
There is a difference between Voluntary, forced and inherited. I hope the Modi government is very clear by definition on these three words. Then only the aam aadmi will not be harassed. Wild chase is not done to meet targets. Discretionary powers given to law enforcement agencies are generally misused. The government as to ensure that there is no discretionary power to law enforcement people in case of proposed gold amnesty scheme.
Physical gold will now vanish from traditional gold markets in chandni chowk delhi or zaveri bazaar Mumbai and all other cities after this news. Just joking!

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. All analyses used herein are subjective opinions of the author and should not be considered as specific investment advice. Investors/Traders must consider all relevant risk factors including their own personal financial situation before trading.Website www.insigniaconsultants.in. Prepared by Chintan Karnani

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