After Narendra Modi’s surgical strike on 500 and 1000 notes, wild rumors have been spread on social media stating the government next move is to seize lockers. Banks, which normally operate about 100 lockers daily, faced a huge rush as they had to open 3,000 lockers for customers who keep their valuables, including gold and cash, in them.

Many say that cash constitutes only a small fraction of the total stock (and flows) of black money. The bulk is in real estate and gold. The flaw in this argument is every illegal real estate deal has a cash component. But the major portion of the black money is saved in the form of gold.

Also Read: This Pic Says The Effect Of Demonetization In India

Govt says existing tax regulations for gold holdings will apply to the gold monetization scheme as well. Let’s have a look how much gold a person can possess as per the latest amendments in Income tax Act, 1995. If the recent dip in prices has made gold an attractive purchase to take back home, here are some rules you must remember before converting your black money to white with demonetization effect.

As per Income Tax Act, those who have been paying wealth tax, only, gold jewelry and ornaments found in excess of the gross weight declared in the wealth-tax return will be seized. Gold deposits over 500gm, not explained by known source of income, will attract income tax under the gold monetization scheme.

Banks will not be allowed to use the gold deposits to meet their statutory liquidity ratio and cash reserve ratio requirements as proposed by the earlier draft.