POSTED ININCOME TAX
Here’s how much Gold jewellery you can keep at home without proof as per income tax act
by TaxConcept
May 13, 2024
old jewellery you can keep at home without proof
Gold jewellery storage limit and tax rules: After the RBI’s announcement to withdraw Rs 2000 denomination currency notes from circulation, reports have claimed that there has been a spurt in demand for Gold jewellery. If you are also buying gold jewellery or ornaments, read on to know how much yellow metal you can keep at home without facing tax scrutiny and how the income from gold is taxed, according to experts.
Contents hide
1 Gold Storage Limit
2 How is Gold taxed?
3 Should you show gold holding in ITR?
4 Tax on sale
4.1 Related
Gold Storage Limit
There is no limit on how much gold jewellery you can keep at home, provided you can explain the source of income that allowed you to buy or invest in case of an Income tax investigation. However, there are also some limits on the amount of unaccounted gold jewellery that can be kept at home without any tax troubles. According to the Central Board of Direct Taxes (CBDT), the limits for holding gold jewellery and ornaments without showing any proof are:
Married woman: Up to 500 grams of gold
Unmarried woman: 250 grams of gold
Men: Only 100 grams of gold
How is Gold taxed?
“Gold remains the most popular and sought-after metal be it for personal use or as an investment. While you may be monitoring the price fluctuations while waiting for that opportune moment to buy gold, it is also important to know that there is a tax cost as well,”
According to Viswanathan, the first part relates to indirect tax that will vary depending on the type of gold and the associated service. For instance, a GST of 3% is payable on the purchase of gold bars, coins and jewellery. When it comes to making charges for jewellery and goldsmith services, the GST rate is higher at 5%.
Further, in instances where individuals want to import gold, they will be liable to pay customs duty, agriculture infrastructure and development cess and GST at notified rates.
However, there is no direct tax for gold buying.
“There is no direct tax at the point of purchase. However, details of the purchase of gold are captured by authorities through PAN details provided at the time of purchase,”
“Hence, it is important to retain sources of income from which heavy purchases of gold are made, since this could trigger queries from authorities,”
Should you show gold holding in ITR?
According to Viswanathan, it is important to disclose gold as part of domestic assets held in the Income Tax Return if the taxpayer has a total income exceeding Rs 50 lakh.
Tax on sale
Upon sale of Gold, capital gains tax is triggered, 3 years being the period of holding for long-term gains, subject to indexation benefit and a tax rate of 20% (before applicable cess).
If the holding period is less than 3 years, the resultant gain, if any, will be treated as short term and taxed at the rates applicable to the taxpayer for their income level.
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