The finance ministry on Thursday said that the Amended I-T Act will not apply to tax jewellery/ gold purchased out of disclosed income or exempted income or reasonable household savings.
The Amended I-T Act will also not apply to tax ancestral jewellery and gold, the ministry said.
“There will be no seizure of gold jewellery up to 500 gm per married lady, 250 gm per unmarried lady and 100 gm per male in I-T searches,” the finance ministry said in a statement.
The Lok Sabha on November 29 passed the Taxation Laws (2nd Amendment) Bill, 2016 that seeks to tax money deposited in banks post demonetisation.
Last month, the government had clarified that it was not considering any proposal to restrict holding of gold by individuals.
Following the demonetisation of 500 and 1,000 rupee notes in a bid to crack down on black money, there were apprehensions among people that the government might impose some kind of restrictions on gold holding by individuals.
There were reports that many people have converted their black money into gold following the announcement of demonetisation of high denomination currency notes by Prime Minister Narendra Modi on November 8.
The government had earlier denied that there was any move to digitise personal lockers in banks amid rumours in social media that they would be opened in only in the presence of revenue officials.
India is the world’s second biggest gold buyer, and it is estimated that one-third of its annual demand of up to 1,000 tonnes is paid for in black money – untaxed funds held in secret by citizens in cash that don’t appear in any official accounts.