Gold is a highly treasured metal in India, having a sentimental value attached to it. It symbolises traditions, love, and customs and passes through generations. People buy gold during various ceremonies and festivals like wedding ceremonies and Dhanteras and as gift items.
Unarguably, gold acts as an ideal investment choice for people since there is technically no gold limit in India, provided the owner can provide proper proof of inheritance or investment. To know more about gold storage rules in our nation, keep reading.
As per the clarification of CBDT (Central Board of Direct Taxes), acceptable gold holding limits in India without need for proof are stated below.
A married woman can possess gold up to the extent of 500 gm
An unmarried woman can hold as much as 250 gm of gold
A man is allowed to possess a maximum of 100 gm of gold
You do not require any proof of owning and investing in gold as long as you do not cross this permitted volume. Moreover, any amount of the precious metal below the specified gold jewellery limit in India cannot be seized even without proof of investment or inheritance.
Owning a higher amount of gold can be allowed without seizing on discretion of the assessing officer. Factors like family status, customs and traditions are considered while taking such a decision.
While purchasing gold, make sure to buy it with valid bills of receipt and keep the tax invoices for future reference. By doing so, you can avoid trouble in the event you need to explain its source. As per the press release of CBDT of 1st December 2016, there is no gold holding limit in India as long as the source of asset or inheritance can be clarified.
However, it is vital that the earnings of the assessee should be in accordance with the amount of gold he/she possesses.
Furnishing the required documents as proof of your holding can help avoid inspection and seizure by the department of income tax. Or else, the assessing officer has the right to seize the entire gold you are holding.
Proof of investment in gold can establish its source. Other than tax invoices during purchase, you may need to furnish proof if the gold is inherited or gifted to you. In such a scenario, it would be very helpful if providing any receipt of the item in the first owner’s name is possible.
Otherwise, submitting a deed of the family settlement or deed of gift declaring the transfer of gold items to you is also possible. Conversely, if no such paper is available with you, the inspector can evaluate the status of your family, traditions, and customs to determine if your claim is true or false.
Section 132 of the IT Act confirms the optimum power of the department of income tax to raid an individual’s privacy. This section states that the IT Department can carry out a search and seizure action on any person possessing money, bullion, jewellery or other valuables that have not been disclosed.
In other words, the department has been given the power for seizing any kind of jewellery, gold coins, bullion, or another valuable article discovered in the course of searching only if the owner cannot adequately explain their source.
The authority of the concerned officer to seize gold ornaments in the phase of searching has been stated in clause (iii) of Section 132 (1), which states that the Authorized Officer can seize such items found while searching as mentioned above.
According to the provision of the above-mentioned clause, any gold found as stock-in-trade of a business during the search will not be seized. However, the concerned IT officer needs to note such stock-in-trade details of that business.
It is relevant to note that inspection and seizure of jewellery can be carried out in two circumstances:
a) In the situation an assessee discloses their jewellery in his/her wealth tax return
b) In the scenario when an assessee does not disclose such jewellery in his/her wealth tax return
In many situations, when gold is seized by the officer either from the bank’s locker or residence of the searched individual, the owner may not be aware of the advantages available by the Act to them. The CBDT guidelines have explained them as mentioned-below.
In these guidelines, the CBDT has clarified certain situations when the jewellery found will not be seized. Those are as mentioned below:
As long as a wealth-tax assessee does not exceed the allowed limits as declared in his/her wealth-tax return.
An individual who is not a wealth-tax assessee does not exceed the limit as stated in the CBDT acceptable limit (up to 500 gm. for a married woman, 250 gm. for an unmarried woman, and 100 gm. for a man).
Considering a family’s status, practices and customs and the society to which it belongs, the officer may allow a bulk amount of jewellery to be released. However, the Commissioner or Director of Income Tax should be reported on this after the searching with details of the search report.
Tax on income under section 115BBE is 60%
Surcharge (subject to general cess and cess for higher education applicable) is 25% of the taxed amount
A penalty of 10% will be levied on the above tax amount u/s 271AAC (In the event wherein the income is not shown in a tax return file u/s 139)
The Courts, on several occasions, have interpreted the CBDT instructions as mentioned above to maintain that if the source of purchased jewellery found in a search is available, it cannot be treated as an undisclosed investment.
The High Court of Gujarat in the instance of CIT v. Ratanlal Vyaparilal Jain (2011) 339 ITR 351.
ITAT, Surat, in the event of Smt. Kasturben m. Pithavadiwala in ITA No 70 to 72/AHD/2017 dated 11/02/2020
High court of Allahabad in the instance of Commissioner of Income-tax, (Central), Kanpur vs. Ghanshyam Das Johri  41
Now, you can understand that since there is no gold limit in India, you can store as much gold as you want with valid and acceptable proofs. You need not worry about these being seized them by the IT department. So, never forget to buy gold with the tax invoice and keep them with diligence. If it is your inherited asset, having a family settlement deed, will etc., will be helpful.
As specified by CBDT, gold holding limits in India without need for proof for a married woman is 500 gm, for an unmarried woman is 250 gm and for a person is 100 gm. For any amount higher than this, the owner must be able to furnish a valid proof of source of such gold.
In India, you can store gold in bank lockers, digital gold, metal depositors, and even secret storage in your home.
While buying gold, ensure that it has the BIS Hallmark that certifies its genuineness, cost per gram, exact weight, purity level, and other charges.
Yes, you can send gold for commercial purposes like stock transfer. However, to do so, you will need an E-way bill.
Make sure to verify if the jewellery you are buying is hallmarked, purity level, cost per gram, accurate weight and additional making charges.
The state of Karnataka, also known as the 'Land of Gold', is the largest producer of gold in India. It produces nearly 80% of the gold in this country.
You can buy gold adhering to the gold limit in India as by CBDT. The limit for a woman who has married is 500 gm, for an unmarried woman, 250 gm and for a man, 100 gm.