Learn about the gold holding limit in India, including rules, regulations, and tax implications. Understand how much gold you can keep at home and the consequences of exceeding the limit.
In India, buying gold is a tradition that goes beyond investment. It is cherished for its role in jewellery, a favourite among women, and many people also keep gold as a valuable asset for emergencies. But how much gold can you safely store at home? What are the consequences of exceeding this limit? Are there taxes when you sell gold? This guide provides detailed answers to these important questions.
According to Income Tax regulations set by the Government of India, there are specific limits on how much gold you can legally keep at home, with different limits for women and men. The Central Board of Direct Taxes has established these thresholds to ensure compliance. If you possess more gold than the allowed limit, you must provide proof of ownership, such as receipts for the gold purchases. It’s important to keep these receipts safe to avoid any legal issues.
Under the Income Tax Act, the permissible gold limits at home are as follows: married women can hold up to 500 grams of gold, unmarried women can keep up to 250 grams, and men are allowed to have a maximum of 100 grams of gold.
If you have legally purchased gold using your income, you are not required to pay any tax on it. Gold jewellery will not be confiscated as long as it stays within the prescribed limits. However, if you are found to possess more gold than the allowed amount, you must provide receipts to prove its legal acquisition. Without proper documentation, the excess gold may be confiscated, and legal action could be taken against you.
There is no tax on simply holding gold at home. However, if you sell your gold, you will be subject to tax. Specifically, if you sell gold that you have held for more than 3 years, you will incur a 20% Long Term Capital Gains Tax (LTCG) on the profit earned from the sale.
If you sell a gold bond purchased within 3 years, the profit will be added to your income and taxed according to your income tax slab. For gold bonds sold after 3 years, a 30% tax will be imposed on the profit. However, if you hold the gold bond until maturity, you will not incur any tax on the profit earned.