Indian budget 2016-17: Key proposals for the gold, diamond and jewellery segments

Finance Minister Arun Jaitley put forward the following proposals in his budget speech that would impact the gold, diamond and jewellery segments:

  1. Redemption by an individual of Sovereign Gold Bond issued by the Reserve Bank of India under the Sovereign Gold Bond Scheme, 2015 shall not be charged to capital gains tax.
  2. Long terms capital gains arising to any person on transfer of Sovereign Gold Bond shall be eligible for indexation benefits.
  3. Interest earned on Deposit Certificates issued under Gold Monetisation Scheme, 2015 and capital gains arising from them shall be exempt from tax.
  4. In case of a foreign company engaged in business of mining of diamonds, no income shall be deemed to accrue or arise in India to it through or from the activities which are confined to display of uncut and unassorted diamonds in a notified Special Zone.
  5. Excise duty exemption jewellery [excluding silver jewellery, other than studded with diamonds or other precious stones namely, ruby, emerald and sapphire] is being withdrawn with a higher threshold exemption upto Rs 6 crore in a year and eligibility limit of Rs 12 crore, along with simplified compliance procedure. Excise duty of 1 percent to be re-introduced after four years.

 

 

 

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