Revamped Gold Deposit Scheme (R-GDS) Benefits

Indians love gold and for a long time, they have been investing in this yellow metal mostly in the form of gold jewellery and gold coins. Be it a festival or any other auspicious occasion, this glittering metal is always a part of celebrations. As per some reports, Indian households and institutions (such as temple trusts) have about 20,000 metric tonnes of gold lying idle. To immobilise this gold and bring it to some productive use, the Government of India introduced the Gold Monetisation Scheme. The Gold Monetisation Scheme modifies the existing ‘Gold Deposit Scheme’ (GDS) and ‘Gold Metal Loan Scheme (GML). Now the scheme includes Revamped Gold Deposit Scheme (R-GDS) and Revamped Gold Metal Loan Scheme (R-GML). To know more about the Revamped Gold Deposit Scheme, read on.

Revamped Gold Deposit Scheme (R-GDS) Benefits

The benefits of R-GDS are given as follows:

• Immobilise the unused gold: The scheme is introduced with an aim to bring the idle gold into circulation. This will increase the recycling of domestically-held gold and also decrease jewellers’ dependence on imported gold.
• Households and other institutions can earn interest: The scheme is a great opportunity for households and other institutions (such as temple trusts) to earn interest and storage on gold which otherwise is earning nothing.
• Tax exemption: The earnings on the Gold Deposit Scheme are exempted from capital gains tax, wealth tax and income tax. Even when the value of your gold deposit increases, capital gains tax will not be levied on it or on the interest you earn from it.
• Flexible redemption: Investing in this scheme also offers the depositors an option or flexibility to redeem the interest or principal on their gold deposits either in cash or gold. But the choice must be declared at the time of deposit.

Revamped Gold Deposit Scheme (R-GDS) Features

The features of the Gold Deposit Scheme are as follows:

R-GDS Eligibility

• All resident Indians are eligible for gold monetization scheme including:
• Individuals – singly or jointly (as Former or Survivor)
• HUFs (Hindu Undivided Families)
• Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies)
• Proprietorship & Partnership firms
• Charitable institutions
• The central government, state government or any other entity owned by the central government or the state government

Gold Deposit Limit

• Minimum Gold Deposit Limit: 30 grams of gold

Note: Gold in the form of bars, coins and jewellery (excluding stones and other metals) is acceptable.

• Maximum Gold Deposit Limit: No Limit

Types of Gold Deposit Schemes

There are 3 types of deposits under R-GDS:

• Short Term Gold Deposit (STGD)
• Medium Term Gold Deposit (MTGD)
• Long Term Gold Deposit (LTGD)

Gold Deposit Schemes’ Tenure

• Short Term Gold Deposit: 1-3 years
• Medium Term Gold Deposit: 5-7 years
• Long Term Gold Deposit: 12-15 years

Rate of Interest of Gold Deposit Schemes

STGD	MTGD	LTGD
At the bank’s discretion	2.25% p.a.	2.50% p.a.

Note: The figures given in the table are indicative and are subject to change at the banks’ or RBI’s (Reserve Bank of India) discretion without prior information.

Repayment

• STBD: The depositors have the option to take repayment of principal either in gold or equivalent rupees as on the date of maturity.
• MTGD & LTGD: The redemption of the deposit will be either in gold or rupees equivalent of the value of gold as per then prevailing price of gold. However, 0.20% administrative charges will be levied in the case of redemption in gold.

Premature Payment

• Short Term Gold Deposit: Allowed after a lock-in period of 1 year with a penalty on applicable interest rate
• Medium Term Gold Deposit: Allowed to withdraw any time after 3 years with a penalty on interest
• Long Term Gold Deposit: Allowed to withdraw any time after 5 years with a penalty on interest

Note: The Interest penalty for MTGD & LTGD will be as per the RBI notification (dated 21.01.2016).

Nomination Facility

The nomination facility is available for deposits in single names in an individual capacity.