Navigating Gold Ownership in India: Limits, Taxes, and Your Rights

Gold holds a special place in Indian households, serving as both an investment and a cultural symbol. This article clarifies the rules surrounding gold ownership and storage in India.

Limits on Gold Storage:

The Central Board of Direct Taxes (CBDT) outlines limitations on gold holdings based on income source. As long as you can demonstrate legitimate income sources, like agricultural income, documented inheritance, or reasonable savings, there’s no tax implication on the amount of gold you possess. Here’s a breakdown of the general allowances:

• Married Woman: Up to 500 grams
• Unmarried Woman: Up to 250 grams
• Man (Married or Unmarried): Up to 100 grams

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Tax Implications on Gold:

• Selling Gold: Tax treatment depends on the holding period. Selling gold within three years of purchase attracts a short-term capital gains tax based on your income tax slab. Disposing of gold after three years results in a long-term capital gains tax of 20.8% (20% tax + 4% cess), with an adjustment for inflation (indexation benefit).
• Gifts: Gold received as a gift from close relatives (parents, spouse, children) is exempt from tax. However, gifts exceeding ₹50,000 from others are considered “Income from Other Sources” and are taxable.

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Key Takeaways:

• The government doesn’t seize gold within the prescribed limits during lawful searches.
• Understanding income source documentation is crucial for tax purposes.
• Tax implications on gold depend on the holding period and source of acquisition.