Officer conducting search has discretion not to seize even higher quantity of gold jewellery based on factors including family customs and traditions
Whether jewellery in excess of the limit specified in circular dated 11.05.1994 has to be seized by income tax authorities or it can be left without seizure?
CA Naresh Jakhotia
Here is a CBDT clarification which says that Officer conducting search has discretion not to seize even higher quantity of gold jewellery based on factors including family customs and traditions. Also attahced thereafter CBDT circular dated 11.5.1994 which places bar on power of authorities on seizure of ornaments and jewellery.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi,
01 December, 2016.
PRESS RELEASE
Sub: Clarifications with respect to Gold Jewellery under Income Tax Law
In order to remove any doubt about the current position of Income Tax Law with respect to gold jewellery, the following points are categorically clarified:
- There is no limit on holding of gold jewellery or ornaments by anybody provided it is acquired from explained sources of income including inheritance.
- Vide circular dated 11.5.1994, instructions have been issued in the matter of search and seizure of gold jewellery.
- Jewellery and ornaments to the extent of 500 gms for married lady, 250 gms. for unmarried lady and 100 gm for male member will not be seized, even if prima facie, it does not seem to be matching with the income record of the assesse.
- Officer conducting search has discretion not to seize even higher quantity of gold jewellery based on factors including family customs and traditions.
(Meenakshi J. Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
Official Spokesperson, CBDT.
CBDT Circular Dated 11.5.1994 reads as under:
Instances of seizure of jewellery of small quantity in the course of operation under section 132 have come to the notice of the Board.
The question of a common approach to situation where search parties come across items of jewellery has been examined by the Board and following guidelines are issued for strict compliance.
(i) In the case of a wealth-tax assessee, gold jewellery and ornaments found in excess of the gross weight declared in the wealth-tax return only need to be seized.
(ii) In the case of a person not assessed to wealth-tax gold jewellery and ornaments to the extent of 500 gms. per married lady 250 gms per unmarried lady and 100 gms. per male member of the family, need not be seized.
(iii) The authorized officer may having regard to the status of the family and the customs and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. This should be reported to the Director of Income-tax/Commissioner authorising the search all the time of furnishing the search report.
(iv) In all cases, a detailed inventory of the jewellery and ornaments found must beprepared to be used for assessment purposes.
