Circular No. 396

1539. Additional relief of gold, gold coin, gold ornament tendered within 6 months of the date of death of deceased as subscription for issue of Gold Bonds, 1977 - Notification issued under sub-section (2) granting reduction in principal value of estate

What this is

Circular No. 396 was issued by the Central Board of Direct Taxes on 28 September 1984. Its subject is 1539. Additional relief of gold, gold coin, gold ornament tendered within 6 months of the date of death of deceased as subscription for issue of Gold Bonds, 1977 - Notification issued under sub-section (2) granting reduction in principal value of estate.

What it does

Reproduces a Central Government direction under section 33(2) of the Estate Duty Act, 1953, giving a reduction in the principal value of an estate where gold is subscribed to the gold bond scheme. Where gold, a gold coin or a gold ornament forming part of a deceased person's estate is tendered within six months of the date of death as subscription for the issue of 6.5 per cent Gold Bonds, 1977, the principal value of the estate is to be reduced by the difference between the market price of that gold on the date of death and the market value of the bonds on the date of their issue.

Why it was issued

The Central Government exercised its power under section 33(2) to give additional relief where estate gold was converted into the notified gold bonds.

Who it reaches

Accountable persons administering an estate containing gold
Heirs subscribing estate gold to the gold bond issue
Estate duty authorities computing the principal value
Valuers pricing gold as at the date of death

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.33	no counterpart recorded

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

1539. Additional relief of gold, gold coin, gold ornament tendered within 6 months of the date of death of deceased as subscription for issue of Gold Bonds, 1977 - Notification issued under sub-section (2) granting reduction in principal value of estate
In exercise of the powers conferred by sub-section (2) of section 33 of the Estate Duty Act, 1953 (34 of 1953), the Central Government hereby directs that where any gold, gold coin or gold ornament, forming part of the estate of a deceased person, is tendered within six months of the date of the death of the deceased, as subscription for the issue of 6 ½ per cent Gold Bonds, 1977, then the principal value of the estate of the deceased shall be reduced by the amount representing the difference between the market price, on the date of death of the deceased, of the gold, gold coin or gold ornament accepted as subscription for the Bonds issued and the market value of such Bonds on the date of their issue.
Notification : No. GSR 337, dated 22-2-1963.

What to watch

The tender must be within six months of the date of death; outside that window the reduction does not arise.
The reduction is a difference between two values taken on two different dates, so both have to be established.
This is an Estate Duty Act notification, No. GSR 337 dated 22nd February 1963, not a CBDT income-tax circular; the record's own date of 1984 does not match the notification's date.
Estate duty was abolished for deaths after March 1985, and the bond issue it refers to has long matured.

Where you meet it

In an old estate duty assessment where estate gold was converted into the bonds and the reduction was claimed.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 443 — 1537. Additional relief to property bequeathed to educational institutions and hospitals - Notification issued under sub 13 December 1985
Notification No. GSR 83 — 1534. Additional relief to property forming part of trust created for promoting advancement of science, etc. - Notificat 6 January 1985
Circular No. 381 — 1538. Additional relief to any one building in occupation of de-recognised Ruler declared as his official residence - No 1 May 1984
Circular No. 377 — 1535. Additional relief to property bequeathed to Jawahar Lal Nehru Memorial Fund - Notification issued under sub-sectio 21 February 1984
Circular No. 352 — 1540. Additional relief to property in respect of which gift-tax has been paid and estate duty has also been levied - No 8 December 1982
Circular No. 343 — 1538. Additional relief to any one building in occupation of de-recognised Ruler declared as his official residence - No 29 May 1982

← Circular No. 397 · Circular No. 395 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.