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As the budget process is on, typically, these types of speculative reports do appear, Finance Ministry sources told NDTV.
Reports had indicated that scheme would try to overcome limited success of an earlier amnesty scheme Pradhan Mantri Garib Kalyan Yojana (PMGKY), also known as IDS-II, launched in 2017, post-the demonetisation exercise.
It was reported that the new amnesty scheme would allow gold hoarders a chance to come clean on investment made using black money by declaring their possession and paying tax on it.
It is estimated that the total stock of gold held by Indians will be about 25,000 tonnes. The total market value of this gold stock is around $1.25 trillion. India imports around 800 tonnes of gold every year worth $40 billion, according to Indian Bullion and Jewellers Association.
"Government should take all the stakeholders together to formulate Gold Amnesty Scheme and there should no surprise announcement in announcing and amnesty scheme," SK Jindal, spokesperson of Indian Bullion and Jewellers Association told NDTV.
The government has several times in the past increased duty on the import of gold into India, which is the world's second largest consumer of the precious metal after China. A higher duty on gold discourages gold imports, which in turn helps in bringing down the trade deficit.
"There is fear among people that if they declare their stock of gold then tax officials may harrass them. There have been instances when government said something and tax officials did not agree with the government, Mr Jindal said.
As part of efforts to curb black money, the government decided to demonetise old Rs. 500 and Rs. 1,000 notes on 8 November, 2016.
As much as 99.3 per cent of the junked Rs. 500 and Rs. 1,000 notes have been returned to the banking system.
Of the Rs. 15.41 lakh crore worth Rs. 500 and Rs. 1,000 notes in circulation on November 8, 2016, when the note ban was announced, notes worth Rs. 15.31 lakh crore have been returned.