Well, the utensils or vessels route could be plugged though it is surprising that it has not been done even after couple of decades after the Bombay High Court led the way in pointing to the scope for tax evasion.

The failure to make an amendment in the income-tax law is even more perplexing given the fact that no quarter has been given to gold vessels in the wealth tax law.

As for any other legitimate scheme, one can invest in the Gold Bond Scheme 1991 under which the gold offered to the specified bank would be morphed into interest earning bonds.

Besides earning interest, more important for you, capital gains on redemption of such bond or sale of such bond would be exempt from tax.

As is well known, there is no thriving market for bonds in India.

In the event, gold bonds may have to be sold in the OTC market which does not make for a transparent price discovery mechanism. An exchange is a more efficient price discovery.

S. MURLIDHARAN

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