Gold Limit: The festive season often marks a tradition of buying or investing in gold. But, they have many questions in their mind while buying gold. Like how much gold can be legally kept at home, whether there will be a penalty for keeping more than the limit, what are the rules of storage and when will the tax have to be paid, etc.
How much gold can you keep at home?
In fact, no law directly decides how much gold a person can keep. But you must be able to show the source of the gold you have, especially for tax purposes.
If you own more gold than the levels mentioned below, the Income Tax authorities may ask for documents and proof of income.
- Men (married and unmarried) – 100 grams gold
- Unmarried women – 250 grams gold
- Married women – 500 grams gold
These limits are for the information of tax authorities, so that they can differentiate between legal and illegal gold. According to CBDT, if gold is purchased from declared income, inherited from the family and is within the above limits, then it will not be taxed.
Will gold kept at home have to be declared?
No. As long as your gold is within the prescribed limit, there is no need for declaration. Gold can be kept in any form like jewellery, coins or bars. But always keep the documents ready for tax, so that you can show them when needed.
Will there be a penalty if I have kept more gold than the limit?
Yes. Keeping gold more than the limit will be considered as hidden income. In this case, tax penalty may be imposed. Such gold can also be confiscated during income tax investigation.
Is gold kept at home tax free or not?
There is no tax on keeping gold within a certain limit. Tax is levied only at the time of purchase (3% GST) or sale (capital gains tax). If you are not able to show proper documentation of gold exceeding the limit, fine may be applicable.
If you sell gold within three years of purchasing it, short-term capital gains (STCG) tax will be levied. Long-term capital gains (LTCG) tax will be applicable on selling after three years.
Limit of digital gold, mutual funds
Digital Gold: No limit on purchases, but GST and small charges apply. Digital gold can be purchased up to ₹2 lakh in a day. There is no STCG tax, LTCG tax is 20%.
Sovereign Gold Bond (SGB): AYou can invest up to Rs 4 kg in a year. The interest earned on SGB is added to taxable income, but becomes tax-free after eight years. GST is not applicable.
Gold ETFs and Mutual Funds: LTCG tax has to be paid at the time of sale.
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