The Gold monetization scheme finally seems to have found a few takers. And as expected, not individuals but temples. First it was Sidhdhivinayak temple in Mumbai which said that it would move 40 kgs of gold to this scheme. And now it is Somnath Temple of Gujarat – the first one to do so from the state. It will be depositing some 35 kgsod “idle” gold.
The gold monestisation scheme’s intentions were good – it is indeed a much better option than holding physical good, earning you money while sitting idle while its value appreciates along with gold prices. But the spoiler was the tax - TDS is not applicable on the interest component, but interest earned on gold bonds will be added to the income and taxed. That’s not all. tTere is capital gain tax too if sold before three years – exactly like physical gold. Sell after three years and pay 20% tax but with benefits of indexation - cost of acquisition will be adjusted against inflation in the value of asset.
Well, the intention was good but in our country it did take off. The biggest reason being that most of the gold transactions which happen in our country today, are in cash. Gold and land has the maximum black money – thus was a flop show the moment it was announced.