How much gold can Indians legally store at home?
What's the story
India has always been obsessed with gold, and people adore the precious metal for investment purposes and cultural reasons, too.
However, the central government keeps tightening the regulations on storing gold at home in order to track unaccounted income and combat black money.
Hence, it is important to know how much gold is legally permitted to be held in India.
Here's everything to know.
Details
No limit for possessing gold jewelry
As per the Central Board of Direct Taxes (CBDT) dated December 1, 2016, there is no maximum limit on holding gold jewelry/ornaments if the possessor can justify the source of income.
No limit has been prescribed for possessing gold jewelry bought by individuals using their disclosed income, savings that have already been taxed, money legally received through inheritance, or exempted sources like agricultural income.
Specifications
Limits for holding gold jewelry without proof
The limit for holding gold jewelry when the possessor doesn't have supporting documents or cannot explain the source depends on various factors.
According to CBDT, gold jewelry/ornaments wouldn't be confiscated if it is under these limits: 100gm for men, 250gm for unmarried women, and 500gm for married women.
Income Tax officials can't seize the above-specified jewelry amounts even if one's income doesn't justify it.
Selling gold
Rules differ for the sale of gold
Meanwhile, there are different rules for selling gold.
The income from the sale of gold held for three or more years is subject to long-term capital gains (LTCG) tax—20% with an indexation benefit, according to NDTV.
If the sale is made within three years of the gold purchase, the gains are added to the individual's income and taxed at the applicable income tax slab.
SGBs
What do rules say about Sovereign Gold Bonds?
When selling Sovereign Gold Bonds (SGBs), too, the gains from the sale are added to one's income and taxed according to the concerned tax slab.
When SGBs are sold after three years, the gains are taxed at a rate of 20% with indexation and 10% without indexation, per NDTV.
Notably, if SGBs are held until maturity, no tax will be levied on the gains.
Proof
How to justify source of jewelry?
To justify their income source for gold investment, people must have proof like the jeweler's invoice.
If someone inherits gold/receives a gift, they must have a copy of the will of the person from whom it was inherited or a family settlement deed, gift deed, or receipt from the person who gifted it.
Sometimes, social status, community traditions, and customs can be considered proof.