How Much GOLD can You Keep at Home and How is it Taxed? Must Check limits Here
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Posted Date : 13-Feb-2023 , 10:35:15 pm | Posted By CA.Khurana Vivek
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Gold is more than a precious metal in India. It represents traditions, customs, love and a lot of emotions. But as much as Indians love to hold gold, there is confusion as to how much of gold can people keep including the inherited and purchased.
How much gold you can keep at home?
How much GOLD can you Own / Keep at Home? Check Limits and Income Tax Rules
Physcial Gold
Digital Gold
Sovereign Gold Bond (SGB)
Gold ETFs and mutual funds
Physical gold
There is no maximum limit of Gold a person can hold in India if it is from explained sources and his / her Income Tax Return Corresponds the same.
CBDT, through a press release, had clarified that there is no limit on holding of gold jewellery or ornaments if acquired from explained sources of income or through inheritance.
Therefore, it is always advisable to purchase gold under valid tax invoices and retain those invoices for future reference. In case of gift or inheritance, documents like a gift deed or will or other documents must be obtained and retained as proof of such investment.
However the CBDT (Central Board of Direct Taxes) under its circular has defined limits for seizure in the event of raid.
In simple words a person can hold such amount of gold without explaining its source as given below:
Married Female: 500 grams
Unmarried Female: 250 grams
Married/Unmarried Male: 100 grams.
But the above limit does not apply on Gold Coins and bars / bullion i.e.
one can not hold any amount of Gold in form of Coins / Bullion without holding proper documents for explaining its source and unless proper disclosure has been made in his / her Income Tax Return.
For instance, if there are 4 members in your family , one married female, one unmarried female, one married male and one unmarried male, then the total amount of gold that will not be seized amounts to:
Married/Unmarried Male: 100 grams.
Married Female (Wife) 500 grams
Unmarried Female (Daughter) 250 grams
The limits apply only to the family members of the person in respect of whom search proceedings are initiated. If any jewellery belonging to any other person(not being a family member) is found, then the same can be seized by the tax officers.
On seizure of such gold jewellery and ornaments, the assessee shall be given an opportunity for explaining the source of income for making such investments.
If the assessee fails to provide an explanation or the explanation given is not satisfactory, then the same shall be taxable under section 69B at the rate specified in 115BBE of the Act.
The rate specified is 60% plus a surcharge of 25% Plus an HEC of 4% and a penalty of 10% on such tax.
Digital gold
No upper limit on purchase of digital gold. However, the maximum limit to buy gold in a single day is ?2 lakh.
“LTCG is applicable on selling digital gold after 3 years at a rate of 20% plus cess and surcharge.
However, returns on digital gold held for less than 3 years are not taxable directly,
Sovereign Gold Bond (SGB)
A SGB receives an interest of 2.5% per annum, which is added to the taxable income and charged as per the slab. However, any profits through SGBs after 8 years are tax free.
Gold ETFs and mutual funds
Different gold investment instruments have different costs, minimum and maximum limits and tenure periods.
For gold ETFs and mutual funds, LTCG is applicable when held for over 3 years. The rate is also the same - 20% plus 4% cess. and for investments less than 3 years,
How to save tax on LTCG arising on sale of gold?
The Act provides tax exemption of the above LTCG to individuals and Hindu Undivided Family (HUF) under section 54F if the entire sale proceeds are invested in acquiring residential house property.
Income Tax on gold jewellery/bullion/Gold ETFs/ Gold MFs received as a gift
If you receive gold jewellery/bullion/Gold ETFs/ Gold MFs as a gift, it shall be taxable for you if the total market value of gold received exceeds INR 50,000. Based on your income bracket, it is taxed under the head ‘Income from other sources’ at slab rates.
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