Gold Buyers Back to Old Habit

As the Cash Crunch is easing, the customers of Gold are returning to their old habit of paying in Cash. This is mainly due to the fear that electronic sales would be scanned by the tax authorities. The government has made it mandatory to disclose PAN details for transactions more than 2 Lakhs.

[m9ad]

But then the rule is being bent by many jewelers who actually help customers buy gold worth more than Rs 2 lakh in cash by splitting the transaction into smaller bills to avoid the mandatory disclosure of PAN details. After a couple of months of mostly Digital Transactions, now, nearly 40%-45% of the sales are happening in cash.

Such transactions will increase further from March 13th when RBI lifts all the frills on the cash withdrawals from Savings Bank Accounts. Also from April, any jewelry which is worth more than Rs 2 lakh will attract 1% TCS (tax collected at source) charge so the cash transactions will only increase.