Amid this festive season, as customers may look to buy or invest in gold, we answer all the top FAQs about how much of the precious metal you can keep at home legally, if there’s a penalty for exceeding limits, rules about declaration and storage, if any, investments, what the tax requirement is, and more.
How much gold can you keep at home legally?
While there is no explicit law imposing a legal limit on the amount of gold an individual can hold, all people should be able to justify the source, especially for tax purposes.
Thus, if you hold gold above the below-specified levels, income tax authorities can demand to check the documentation and proof of income. Check limits per person below:
- Men (married and unmarried) can hold 100 grams of gold.
- Unmarried women are allowed to hold 250 grams of gold.
- Married women keep 500 grams of gold.
Notably, these limits are a guideline for tax officials during raids to help them differentiate between legitimate and illegitimate gold holdings.
As per the Central Board of Direct Taxes (CBDT), gold purchases made with revealed income sources, inherited from family, and within a reasonable amount, as specified above, are not to be taxed.
Do you need to declare gold stored at home?
No, there is no need to declare gold stored at home unless it exceeds the prescribed limits. Gold can be stored in various forms, including jewellery, coins, and bars. You will, however, need proper documentation for tax purposes and to show in case of assessment by authorities.
Do you need to pay penalty for extra gold stored at home?
Yes. Gold stored at home, which exceeds the prescribed limits, can be considered as undeclared income and be subject to tax penalties. Such gold may also be confiscated during an income tax raid or investigation.
Do you need to pay tax for gold kept at home?
No. There is no tax on storing gold within the prescribed limits at home in India. The tax comes in only at the time of purchase (3 per cent GST) or sale (capital gains tax). However, if you are unable to provide proper documentation for gold exceeding limits at home, penalties may apply.
In terms of tax during sale: If you sell your gold within three years of purchase, short-term capital gain tax (STCG tax) will be applied; and if you sell it after three years, long-term capital gain tax (LTCG tax) will be applicable.
