WGC thinks there is scope for gold in tax saving instruments

It has witnessed a revived interest in gold investment
WGC thinks there is scope for gold in tax saving instruments

The World Gold Council believes a thought needs to be given on the taxes and levies currently preventing investment in gold from expanding further. According to the Council, amidst the current global economic scenario, there is a revived interest in gold investment across the globe, including the Indian market.

In 2009, the Reserve Bank of India has purchased 200 tonnes of gold from the IMF. However, in India, subsequent to the 1992 reforms, there have been no major moves to further liberalise the gold investment market. World Gold Council believes that there needs to be a change to the regulatory definition of gold in India. While gold has been increasingly viewed as an investment asset in international markets, in India it is still being treated as a commodity. Also, if gold is to be treated as an investment option, its role for income tax benefits, especially for working women and the ‘bottom of the pyramid’ segment, must be clarified.

Ajay Mitra, Managing Director, Indian Sub-Continent, World Gold Council addressed a panel discussion entitled “Growth of the Indian Gold Industry” organised by the Federation of Indian Chambers of Commerce & Industry earlier this month, saying, “There are a number of ways of accessing the investment benefits of gold and it is time that the Indian government started considering it for the provision of income tax benefits, at least for working women and for the bottom level in the income tax brackets. Gold should play a more significant role in the sustainable growth of the Indian economy and WGC welcomes the increasing pressure on Government to enable this”

Portfolios containing a small allocation of gold also are proven to be overall more robust and better equipped to cope with market uncertainties than others. Research conducted by the World Gold Council highlights a need for the Pension & Insurance Corpus to diversify its investment assets to create greater stability in the portfolio.

“There needs to be a re-think on regulatory issues, taxes and levies that currently prevent investment in gold from expanding further and offering Indian citizens access to much needed ways of protecting their wealth” opines Ajay Mitra.


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