Skip to main content

Gold Monetisation Scheme

 Union Budget 2015 proposed the Gold Monetisation Scheme to make use of the idle gold and bring down the country's CAD. Here are the proposals in the draft guidelines
 The government has come up with draft guidelines for the Gold Monetisation Scheme (GMS), which was proposed during the Union Budget 2015. Monetisation of gold will not only put idle gold to use but will also help rein in the ballooning current account deficit (CAD). The GMS will also make gold available to the gems-and-jewellery sector in the form of loans from banks. This will give boost to the sector. The Scheme will be launched first in select cities only. Over time, it will be extended to other cities.
 

How it will work
In order to monetise your gold holdings (bullion or jewellery), you will first need to ascertain the purity of the gold you own. For that, under the Scheme, there would be around 350 purity-testing centres. You will need to take your gold to one of the testing centres. The testing centre will test the purity of gold and issue a certificate of deposit to you. The certificate will state the amount and the purity of the gold deposited.

The testing centre will also melt the gold you provide. This means that you cannot get the same jewellery back which you had deposited. The entire process of purity ascertainment will require your consent at multiple stages, with the results of each stage shared with you. So, if you want to back off anytime, you very well can.

The purity-ascertainment process will also incur a nominal fee. Also, the minimum quantity of gold that you can bring is 30 gm.

Once you get the certificate of deposit from the purity-testing centre, you can take it to your bank. The bank will open a gold savings account for you. In the gold savings account the amount of gold you have deposited will get credited. With that you will have successfully monetised your gold holdings.

What you will earn
As per the draft guidelines, the interest rate to be paid on your gold holdings will be decided by the bank. The interest will be credited to your account after 30-60 days of opening the account. Note here that both the principal and the interest will be valued in gold. For example, if you have deposited 100 gm gold and you are paid one per cent interest, then your gold holdings will be shown 101 gm.

 

How you will be taxed
The GMS will be exempt from all kinds of taxes - capital gains tax, wealth tax and income tax.

 

What's the tenure?
The GMS will work like a fixed deposit. The minimum lock-in period will be one year. The period could be increased in multiples of a year thereafter. You will also be able to withdraw your gold deposits within the lock-in period.

 

How redemption will happen
You will be able to redeem the gold deposited in terms of cash or gold.

 

Hits and misses
The GMS is a well-intentioned scheme aiming to bring down the CAD. In the last couple of years, gold prices have remained depressed. This has disappointed gold investors. Also, idle gold earns no interest. On the contrary, storing it safely requires expenditure to be made. Given these downsides, the GMS will help gold investors earn income from their gold holdings. Institutions like temples will also be able to monetise their holdings.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
Read more

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...
Read more

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...
Read more

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...
Read more

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now