Cash purchase of gold to become expensive from June 1
New Delhi: Cash purchase of gold, including coins and articles, exceeding over Rs 2 lakh will attract one per cent tax from June 1.
"The sale of bullion (including coins/articles) in cash in excess of Rs 2 lakh shall be subject to TCS (Tax Collection at Source) at rate of one per cent. Similarly, sale of jewellery in cash in excess of Rs 5 lakh shall be subject to TCS of one per cent," it said in a clarification on the changes made in the Finance Bill 2013.
The modified tax provisions will come into effect from June 1, 2013.
As per the existing provisions, coins are neither included in bullion nor in jewellery, "therefore, coins, even when amounting to more than Rs 2 lakh in value, were being sold in cash without TCS".
Clarifying that the government has not imposed any new levy, only the exclusion of coin or any other article (weighing 10 gm or less) has been done away with in the Bill passed by the Lok Sabha yesterday.
"It is not a new levy of tax but continuation of old levy except withdrawal of exemption in the case of coins/articles weighing 10 gm or less," the Ministry said.
While moving the Bill in Lok Sabha, Finance Minister P Chidambaram had said the exemption was giving opportunity for misuse.
The Bill will go to the Rajya Sabha for approval before being singed by the President into law.