Gold Limit: The festive season is often a time for buying or investing in gold. However, many people have questions about how much gold can legally be stored at home, whether there will be a penalty for exceeding the limit, storage rules, and when taxes must be paid.
How much gold can I keep at home?
There’s no law that directly limits how much gold a person can possess. However, you should be able to prove the source of the gold you own, especially for tax purposes.
If you have more gold than the limit mentioned below, the Income Tax authorities may ask for documents and proof of income.
- Men (married and unmarried) – 100 grams of gold
- Unmarried women – 250 grams of gold
- Married women – 500 grams of gold
These limits are for the information of tax officials, so that they can differentiate between legitimate and illegitimate gold. According to the CBDT, if the gold was purchased with declared income, inherited from family, and is within the above limits, it will not be taxable.
Do I have to declare the gold kept at home?
No. As long as your gold is within the prescribed limits, there’s no need to declare it. Gold can be stored in any form, such as jewelry, coins, or bars. But always keep tax documents ready to show if needed.
If you keep more gold than the limit, will you be fined?
Yes. Possessing gold in excess of the limit will be considered concealed income. Tax penalties may apply. Such gold can also be confiscated during an income tax investigation.
Is gold kept at home tax free or not?
Gold holdings within a certain limit are not taxable. Tax is levied only at the time of purchase (3% GST) or sale (capital gains tax). Failure to produce proper documentation for gold holdings exceeding the limit may result in penalties.
If you sell gold within three years of purchase, short-term capital gains (STCG) tax will apply. If you sell after three years, long-term capital gains (LTCG) tax will apply.
Digital gold, mutual funds limits
Digital Gold: There is no purchase limit, but GST and a small fee are applicable. Up to ₹2 lakh worth of digital gold can be purchased per day. No STCG tax, but LTCG tax is 20%.
Sovereign Gold Bond (SGB): You can invest up to 4 kg per year. Interest earned on SGB is included in your taxable income but becomes tax-free after eight years. GST is not applicable.
Gold ETFs and Mutual Funds: LTCG tax is payable at the time of sale.
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