In India, gold is not just a metal, but a symbol of heritage, tradition, and faith. Across India, from north to south, people have a special attachment to gold. Be it a wedding or a festival, every happiness seems incomplete without gold. This is the reason why Indian families have been accumulating gold from generation to generation—sometimes in the form of jewellery and sometimes in the form of coins.

Did you realize the Income Tax Department monitors your gold purchases?

 If you have more gold than the prescribed limit and you are unable to prove its legality, then you may get an income tax notice or even a raid. In such a situation, it is important to know how much gold you can legally keep at home so that any kind of tax investigation can be avoided.

So, what are the specific limits for keeping gold at home for different individuals? Check out these regulations to ensure compliance.

How much gold can you keep at home?

According to guidelines from the Central Board of Direct Taxes (CBDT), there are prescribed limits on how much gold jewellery individuals can keep without the risk of seizure during a raid. However, it's important to retain proof of purchase or inheritance, especially for amounts above the limit.

How much gold can women keep with themselves?

The income tax laws say that a married woman can keep 500 grams of gold with her. The limit of gold for an unmarried woman is kept at 250 grams. Men of the family are allowed to keep only 100 grams of gold.

Is there a tax on inherited gold?

If you have purchased gold from declared income or tax-exempt income (such as agriculture) or have legally inherited it, there will be no tax on it. If a raid is conducted, the authorities cannot seize the gold jewellery found within the prescribed limit.

Is there a tax on keeping gold also?

While there is no tax to be paid on keeping gold at home, if one sells gold, one must pay tax on it.

How much tax will be charged on selling gold after three years?

In the Union Budget 2024 presented in July 2024, the government changed the holding period criteria for certain assets, including physical gold, to qualify for short-term capital gains and long-term capital gains. For physical gold, the holding period for short-term capital gains has been reduced to 2 years from the earlier 3 years. To qualify for long-term capital gains, the holding period must be more than 2 years or 24 months.

So, if you sell gold after holding it for 2 years, the profit made will be subject to the LTCG tax of 12.5% without any indexation benefit.

Key Takeaway

To avoid any legal or tax-related issues:

• Keep documentation for gold purchases or inherited gold.
• Stay within the CBDT’s exempt holding limits if you lack proof.
• Understand the revised capital gains rules when selling gold.