Gold Monetization Scheme

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What Is Gold Monetization Scheme?

Over 20,000 tonnes of gold in India is lying idle and in order to turn this unused gold into some productive asset, the Indian Government has launched the Gold Monetization Scheme (GMS) in the year 2015. This scheme was launched by the Prime Minister of India, Narendra Modi with an objective to mobilise and facilitate tonnes of gold which is lying idle for some productive purposes.

This will also help the country as it will reduce the dependability of the country on gold imports and will also be benefiting the jewellers as it will allow them to obtain loans. Different lending institutions such as NBFCs and Banks will also be allowed to monetise this gold. A person can deposit his gold in any form in a GMS account and can earn interest as the price of the gold rises up in the market.

What Are The Eligibility Criteria Of The Gold Monetization Scheme?

Individuals, who are either single or jointly accounts
Hindu Undivided Families
Charitable Institutions
Partnership firms and proprietorship firms
Trusts including mutual funds under SEBI regulations
State Government, Central Government or any other entity owned by the State Government or Central Government

What Are The Benefits Of The Gold Monetization Scheme?

The main benefits of the Gold Monetization Scheme are mentioned as under:

Mobilising idle gold- This scheme will help to mobilize the gold medal that has been lying idle for decades in the confined spaces of households, trusts and various other institutions The movement of the gold medal in the national market will also benefit the Indian gems and jewellery sector. It will be a major contributor to the exports of the country.
Earn interest- The gold jewellery that has been lying in your household or your bank lockers does not earn you anything. It, in turn, costs you more as you are paying the bank locker charges to ensure the safety of the same. However, the Gold Monetization Scheme will help you to earn some interest on your deposits which will further be added to your savings.
Avail the security- It is really hard to get bank lockers. If you will open a gold deposit account with a bank, it will eliminate this tension of yours and will also keep your gold safe and secure.
Enjoy the tax benefits- The earnings that you will be getting from the Gold Monetization Scheme are exempted from wealth tax, income tax and capital gains tax. Also, the value of your deposit will not be costing you anything.
Get flexibility on redemption- You have the option of either taking your gold on redemption or cash. However, redemption is much preferred at the time of deposit.
Reduce the reliance of the Government on gold imports- The gold will be supplemented as the RBI’s gold reserves. It will also benefit the Government as it will reduce the cost of borrowing in the long run. It is also expected that it will decrease the dependency of the country on gold imports.
The gold can be accepted in any form such as coins, bars, jewellery, etc
Tie-up with renowned refiner- You can check the purity of your gold as well as can have assessed to your gold at the CPTC Centre