Budget 2025 Expectations : updating the allowable limits on jewelry holdings during income tax searches in India.

This passage argues for updating the allowable limits on jewelry holdings during income tax searches in India. Here’s a breakdown:

Background:

• Cultural Significance: Gold holds deep cultural and religious significance in India, and it is a common form of wealth and investment.
• CBDT Instruction No. 1916 (1994): Provides guidelines for income tax search and seizure operations. It sets limits on the amount of jewelry that can be seized, based on gender and marital status. These limits are:
  • 100 grams for male members
  • 250 grams for unmarried female members
  • 500 grams for married female members
• Rationale: The instruction aims to prevent unnecessary seizure of jewelry that is considered to be part of personal belongings and has been declared in wealth tax returns.

Argument for Enhancement:

• Outdated Limits: The instruction is almost 30 years old. Since then, household incomes in India have increased significantly, and so has the affordability of gold.
• Changing Social Norms: The traditional roles and expectations of women have evolved, and the current limits may not reflect the present reality.
• Need for Rationalization: The passage argues that the limits should be revised to align with current economic and social conditions.

Suggestion:

• Enhance Limits: It is suggested to  increase the allowable holding limits for jewelry to reflect the current economic and social realities in India. This would ensure that tax authorities do not seize jewelry that is legitimately acquired and held for personal use.