India’s existing gold monetisation scheme is yet to take off, garnering deposits of only 20 tonnes of gold till now. Private gold stock in India is estimated at 25,000 tonnes which is worth Rs 110 lakh crore.

MUMBAI: Amid a crash in gold imports following the lockdown, the government has sounded out jewellers and bullion dealers on ways to tap idle gold lying with Indian households.

Among the proposals by the industry are aligning the income tax law with gold deposit scheme, raising gold holding limits under ‘Streedhan’, tweaking the gold monetisation scheme to make it more attractive, and giving greater flexibility to local refineries to scale up as part of a broader gold policy. Some of these suggestions are being examined by the government, two industry sources who have had discussions with senior government officials told ET.

The existing gold monetisation scheme is yet to take off, garnering deposits of only 20 tonnes of gold till now. Private gold stock in India is estimated at 25,000 tonnes which is worth Rs 110 lakh crore. “Families accumulate gold over the years, and even if it’s purchased with legitimate earnings, there may not be adequate documentation to back this. So, many are reluctant to participate in the revamped gold deposit scheme due to fears that they may be questioned by tax officials later,” said a jeweller.

In this context, the Gem & Jewellery Export Promotion Council (GJEPC) has proposed that the government should link the gold monetisation scheme (GMS) with the Income Tax Act which states that gold jewellery to the extent of 500 grams per married women, 250 grams per unmarried women and 100 grams per male member of a family need not be seized. Such seizure, according to a 2016 directive, would not be carried out “even if prima facie, it does not seem to be matching with the income record of the assessee” .