Pranab Mukherjee announces tax relief on jewellery

Bowing to pressure, Finance Minister Pranab Mukherjee on Monday announced a slew of measures to provide relief to the jewellery sector, including removal of levy on branded and unbranded jewellery.

Moving the Finance Bill, 2012 for consideration and passage in the Lok Sabha, Mukherjee halved the capital gains tax for private equity investors to 10 per cent and relaxed the norms for arrest of persons involved in violation of Customs Act.

"The government has decided to withdraw the levy (one per cent excise duty) on all precious metal jewellery, branded or unbranded, with effect from March 17, 2012," he announced, bowing to demand within and outside the House.

He said the threshold limit for TCS (tax collection at source) on cash purchase of jewellery will be raised to Rs 5 lakh from the present Rs 2 lakh.

However, the Minister said, the threshold limit for cash purchase on bullion will be retained at Rs 2 lakh. Bullion will not include any coin or other article weighing 10 gm or less, he added, setting the tone for the debate on the crucial bill.