New Delhi: The Centre on Thursday clarified that new amendments in the income-tax law does not seek to tax inherited gold and jewellery.
“Tax rate under section 115BBE is proposed to be increased only for unexplained income as there were reports that the tax evaders are trying to include their undisclosed income in the return of income as business income or income from other sources. The provisions of section 115BBE apply mainly in those cases where assets or cash etc are sought to be declared as ‘unexplained cash or asset’ or where it is hidden as unsubstantiated business income, and the Assessing Officer detects it as such,” it said.
The finance ministry clarified that the jewellery/gold purchased out of disclosed income or out of exempted income like agricultural income or out of reasonable household savings or legally inherited which has been acquired out of explained sources is neither chargeable to tax under the existing provisions nor under the proposed amended provisions. “The apprehension sought to be created that the jewellery with the household which is acquired out of disclosed sources or exempted income shall become taxable under the proposed amendment is totally unfounded and baseless,” said the ministry.
“No tax will be chargeable if the owner is able to provide a satisfactory explanation. For example, jewellery acquired out of disclosed income or out of exempted income or which is inherited. Legitimately, acquired jewellery will not be taxed and the legal position remains unchanged,” said Deloitte Haskins & Sells partner Sunil D. Shah....