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February 27, 1999
New gold deposit scheme announced
A new gold deposit scheme has been announced to mobilise the idle gold from households, and various charitable and religious institutions in the country.
Under this scheme, selected banks will be permitted to accept gold deposits and issue interest bearing certificates or bonds which on maturity can be reclaimed in gold, Finance Minister Yashwant Sinha said while presenting the Union Budget.
The new gold scheme is intended to mobilise the idle gold from households and various charitable and religious institutions. Under this, selected banks will be permitted to accept gold deposits and issue interest-bearing certificates or bonds, which on maturity can be reclaimed in gold.
This scheme would free depositors from the problem of storage, movement and security of gold in their possession and also provide them a regular source of income. The country would benefit by recycling the idle gold, which will reduce dependence on imported gold.
To encourage this process, the finance minister also announced exemption of interest on the gold deposit bonds from income tax and the value of assets deposited in the scheme from wealth tax. Also any capital gains made on these bonds through trading or at redemption will be exempt from capital gains tax. This scheme, which is to be implemented by the Reserve Bank of India, will not enjoy amnesty.
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