Gold Monetisation Scheme (GMS) 2015
Gold Monetisation Scheme (GMS) 2015
The Government of India announced the Gold Monetisation Scheme vide its Office Memorandum F.No.20/6/2015-FT dated September 15, 2015. The objective of the Scheme is to mobilise idle gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce country’s reliance on the import of gold.
The Government of India announced the Gold Monetisation Scheme vide its Office Memorandum F.No.20/6/2015-FT dated September 15, 2015. The objective of the Scheme is to mobilise idle gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce country’s reliance on the import of gold.
Designated Banks (viz., ICICI Bank, Corporation Bank/Union Bank of India, Indian Overseas Bank, Punjab National Bank, State Bank of India, HDFC Bank, Yes Bank, Dena Bank/Bank of Baroda) under the GMS accept gold deposits under the Short Term deposits (1-3 years).
The gold is accepted at the Collection and Purity Testing Centres (CPTC) certified by Bureau of Indian Standards (BIS). The deposit certificates are issued by banks in equivalent of 995 fineness of gold.
Interest : The amount of interest rate payable for deposits made for the short-term period is decided by the banks on the basis of the prevailing international lease rates, other costs, market conditions etc.
Redemption : For short term deposits and MLTGD, the customer will have the option of redemption of the principal at maturity in Indian rupee equivalent of the value of deposited gold at the time of redemption or in gold.
The Medium and Long Term Gold Deposits were discontinued[ Ministry of Finance, Press Release dated 26.03.2025 https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2115009] w.e.f. 26.03.2025 and redemption of these deposits will be done as per the extant guidelines under the Gold Monetisation Scheme, 2015.
Tax implications on GMS shall be notified by the Central Government from time to time. However, it is clarified that Tax exemption, same as those available under GDS, would be made available to the customers, in the revamped GDS, as applicable. In this direction, the enabling notifications issued by GOI are :
- Exemption of interest earned on gold deposit bonds from Income Tax vide amendment to section 10(15)(vi) of the Income Tax Act by Finance Act 1999. Exemption of various assets deposited in the scheme from Wealth Tax under Section 2(ea) of Wealth Tax Act as amended by Finance Act 1999.
- Ministry of Finance, Press Release dated 26.03.2025 : https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2115009
- Exemption from capital gains made on the bonds though trading or at redemption from Capital Gains Tax under section 2(14)(vi) of Income Tax Act as amended by finance Act 1999.
Further, as per CBDT instructions No. 1916 dated 11th May, 1994 in course of IT Search u/s 132, gold jewellery 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 by the authorities, but the tax penalties, as applicable will be levied.
Revamped Gold Metal Loan Scheme
Gold Metal Loan Account : A Gold Metal Loan Account, denominated in grams of gold, will be opened by the bank for jewelers. The gold mobilized through the revamped GDS, under the short-term option, will be provided to jewelers on loan, on the basis of the terms and conditions set-out by banks, under the guidance of RBI.
Delivery of gold to jewelers : When a gold loan is sanctioned, the jewelers will receive physical delivery of gold from refiners. The banks will, in turn, make the requisite entry in the jewelers’ Gold Loan Account.
Interest received by banks : The interest rate charged on the GML will be decided by banks, with guidance from the RBI.
Tenor : The tenor of the GML at present is 180 days. Given that the minimum lock-in period for gold deposits will be one year, based on experience gained, this tenor of GML may be re-examined in future and appropriate modifications made, if required.
Important links/Documents related to R-GDS
RBI Master Direction No.DBR.IBD.No.45/23.67.003/2015-16
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RBI Master Circular on Loans and Advances - Statutory and Other Restrictions dated July 1, 2015
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