Explanation:

 RBI Simplifies Gold Monetization Scheme Highlights of new norms:
• Interest earned on deposits under the central government’s Gold Monetisation Scheme will not attract any tax; gain through trading or redemption will also be exempted from capital gains tax.
• In the course of any search operation by the income tax authorities, gold jewellery “ to the extent of 500g per married lady, 250g per unmarried lady and 100g per male member of a family need not be seized. But there is possibility of disclosing the source for buying of gold.
• Banks may accept the deposit of gold at designated branches, especially from larger depositors.
• Banks can also allow the depositors to deposit their gold directly with the refiners” with whom the bank had already signed an agreement for the scheme. Such a refinery “can issue the deposit receipts to the depositor”. This was a major demand of temple trusts, many having tonnes of gold and willing to deposit part of that under the GMS(Gold Monetization scheme). Now these depositors need not move gold to a collection centre which could be far away from their storage. Banks may open a branch in an area nearby or the refinery can offer this facility directly to the trust.
• Principal and interest on a short-term deposit shall be denominated in gold. In the case of medium-term and long-term deposits, the principal will be denominated in gold but the interest calculated in rupees, with reference to the value of gold at the time of the deposit.
• Premature redemption under Medium and Long Term Government Deposits (MLTGD): Any Medium Term Deposit will be allowed to be withdrawn after three years and any Long Term Deposit after five years. These will be subject to a reduction in the interest payable. For medium-term deposits, withdrawal between three years and five years will attract a penalty of 0.375 per cent in reduced interest rate. For withdrawal between five to seven years, the penalty will be 0.25 per cent in a reduced interest rate.
• For long-term deposits, the penalty between five to seven years will be 0.25 per cent; between seven to 12 years, 0.375 per cent; between 12 to 15 years, 0.25 per cent.
• Fees to be paid to Banks for their services i.e. gold purity testing charges, refining, storage and transportation charges etc. on Medium and Long Term Gold Deposits. Effectively the banks would be getting a 2.5 percent commission for the scheme which will include the charges payable to the Collection and Purity Testing Centres/Refiners.
• Gold depositors can also give their gold directly to the refiner rather than only through the Collection and Purity Testing Centres (CPTCs). This will encourage the bulk depositors including Institutions to participate in the scheme.
• Bureau of Indian Standards (BIS) has modified the licensing condition for refiners already having National Accreditation Board for Testing and Calibration Laboratories (NABL) accreditation from the existing three years refining experience to one year refining experience. This is likely to increase the number of licensed refiners.
• BIS has published an Expression of Interest (EOI) on its website inviting applications from the more than 13,000 licensed jewellers to act as a CPTC in the scheme, provided they have tie-up with BIS`s licensed refiners.
• The quantity of gold collected under the scheme will be expressed up to three decimals of a gram. This will give the consumer better value for the gold deposited.
• Gold to be deposited with the CPTCs/Refineries can be of any purity. The CPTC/Refiner will test the gold and determine its purity which will be basis on which the deposit certificate will be issued.
• Banks are free to hedge their positions in the case of short-term deposits.