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Indian expats can now take home more duty-free gold
http://www.arabnews.com/saudi-arabia/indian-expats-can-now-take-home-more-duty-free-gold
Indian expatriates can now take home more duty-free gold jewelry in their baggage — of up to Rs 50,000 (SR 3,458) for men and Rs 100,000 (SR 6,917) for women.
The new limits were announced by the country's Finance Minister P. Chidambaram in his 2013-14 budget speech on Thursday in New Delhi, according to Indian media.
India's Customs and Central Excise Rules of 1967 stipulate that a man traveling to India can bring in gold ornaments worth Rs 10,000 (SR 691) while a woman is allowed a maximum of Rs 20,000 (SR 1,383).
The limits were set when the gold price was Rs 40 (SR 2.76) per gram, whereas it is now Rs 3,000 (SR 207) per gram. With the prevailing limits, non-resident Indians (NRIs) have to pay customs duties for a five-gram gold ring.
Indian expatriates in Saudi Arabia have also often complained of customs officers in their country harassing them and taking their gold jewelry. This has been particularly prevalent at some airports in southern states.
India, the world's largest consumer of gold jewelry, imported an estimated 750 tons of gold in 2012 and an additional 200 tons is believed to have been imported through unofficial channels.
"Gold prices have risen since (1991), and passengers have complained of harassment. Hence, I propose to raise the duty-free limit to Rs 50,000 in the case of a male passenger and Rs 100,000 in the case of a female passenger, subject to the usual conditions," Chidambaram said in his budget speech.
A senior Indian banker in Riyadh, Albin Joseph, welcomed the decision of the Finance Ministry. The Indian government has been trying to discourage people from investing in gold and thereby curb the current account deficit. The government has offered incentives for first-time homebuyers and announced new financial instruments to protect savings from inflation.
Emphasizing that the household sector must be incentivized to save in financial instruments rather than buy gold, Chidambaram proposed a three-pronged strategy to encourage people to park their funds in other financial schemes.
Firstly, the Rajiv Gandhi Equity Savings Scheme will be liberalized to enable the first-time investor to invest in mutual funds and listed shares over three successive years rather than one year. The income limit will be raised from Rs 1,000,000 (SR 69,179) to Rs 1,200,000 (SR 83,015), according to Indian media reports quoting the finance minister.
Secondly, a person taking a loan for his first home from a bank or a housing finance corporation up to Rs 2,500,000 (SR 172,948) during the 2013-14 fiscal year will be entitled to an additional deduction of interest of up to Rs 100,000 (SR 6,917).
Other sectors of social security and welfare were accorded priority in grant allocation but the NRI worker community was ignored, said Shihab Kottukad, a leading social worker in Riyadh.
Government has announced a grant of Rs 115 crore (SR 79,556,200) to the Overseas Indian Affairs Ministry which is responsible for the welfare of overseas workers. Although the budget has increased by Rs 35 crore (SR 24,212,700) compared with the previous year, it is not sufficient to carry out welfare, rehabilitation and training schemes for Gulf-bound and returning workers, said Kottukad.
Government reduced the allocation for passport expenses by Rs 107 crore (SR 74,021,800), by granting Rs 453 crore (SR 313,382,000) for passport services in India and abroad. This is because passport services have been out-sourced to private agencies locally and abroad.
The government also announced a Rs 5,000 crore (SR 3,458,960,000) additional equity infusion for debt-ridden national carrier Air India in the next fiscal year as part of its turn-around plan.
India also announced assistance of Rs 1,728 crore (SR 1,195,420,000) to Bangladesh, Afghanistan and Sri Lanka.
E.M. Abdullah of the Indian Fraternity Forum in Jeddah said the Indian government should have addressed more clearly tax implications for NRIs. An Indian entrepreneur in Dammam, Radha Krishna, said the budget offers nothing for NRIs.
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