Conversion of Gold to Electronic Gold Receipt and vice versa

Conversion of Gold to Electronic Gold Receipt and vice versa

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Conversion of Gold to Electronic Gold Receipt and vice versa The Finance minister of India in the Union Budget 2021-22 announced the Gold Exchange to

Conversion of Gold to Electronic Gold Receipt and vice versa

The Finance minister of India in the Union Budget 2021-22 announced the Gold Exchange to Electronic Gold Receipt (EGR), with SEBI being made the regulator of the proposed gold exchange. SEBI has released a regulatory framework for spot trading in gold on stock exchanges through the use of Electronic Gold Receipts (EGR).

In order to promote the use of electronic gold instead of gold and has proposed to exclude the conversion of physical gold into EGR and vice versa by a SEBI-registered Vault Manager from being considered as a "transfer" for capital gains purposes. The cost of acquisition of EGR for the purpose of computing capital gains will be considered to be the cost of gold in the hands of the person in whose name the EGR is issued. The same provisions apply to conversion from EGR to physical gold.

for these changes, several amendments have been proposed to be made to the existing laws via budget 2023:

Amendment Proposed in Sections

Intest a new clause in Section 47 of the Act, to provide that the transfer of physical gold to EGR or vice versa by a Vault Manager shall not be considered a "transfer."

For this newly inserted in section 47 meaning "Electronic Gold Receipt" and "Vault Manager," will be the same as per the Securities and Exchange Board of India (Vault Managers) Regulations, 2021.
A new sub-section (10) will be inserted in Section 49 of the Act, to provide that the cost of acquisition of physical gold or EGR, in the event of a transfer, shall be deemed to be the cost of the other asset (gold or EGR) in the hands of the person in whose name it is issued.

Explanation 1 of Sub-section (42A) of Section 2 of the Act will be amended to include the holding period for the purpose of capital gains, which will include the period for which gold or EGR was held by the assessee prior to conversion.

The above amendments will take effect from April 1, 2024, and will apply for the assessment year 2024-25 and subsequent years.

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Saral Tax India | सरल टैक्स इंडिया: Conversion of Gold to Electronic Gold Receipt and vice versa
Conversion of Gold to Electronic Gold Receipt and vice versa
Conversion of Gold to Electronic Gold Receipt and vice versa The Finance minister of India in the Union Budget 2021-22 announced the Gold Exchange to
Saral Tax India | सरल टैक्स इंडिया
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