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Gold is undoubtedly the most revered precious metal in our country. Understanding the gold limit per person in India is important to ensure safe and secure storage of this valuable metal at home.
Gold is the most popular metal in India. Almost every family in the country at least has some quantity of gold in the form of jewellery and sometimes coins and gold investment plans. Besides its financial value, gold is treated as an epitome of good fortune and wealth in our country.
However, there is a certain limit on how much gold you can keep at home. This is where it becomes important to understand the gold limit in India.
If you want to know how much gold you can keep at home, this blog is for you. We will discuss all the rules and regulations regarding the storage of this precious yellow metal at home.
What is the Gold Limit Per Person in India?
According to the Central Board of Direct Taxes (CBDT), gold purchases made with revealed income sources and exempted revenue such as agricultural income, legally inherited money that could be explained, and a reasonable amount of household savings will not be taxed*.
Following is the allowed gold limit per person in India:
Unmarried Woman: 250 grams
Unmarried Man: 100 grams
Married Woman: 500 grams
Married Man: 100 grams
Note that income tax officials can not take gold jewellery from your home during the search operations if the quantity is within the allowed bracket.
Limits and Income Tax Rules on Storage of Different Types of Gold
Individuals possess various types of gold in their households. Let us understand the limit and income tax rules applicable to different gold types.
Physical Gold
As per the CBDT’s new circular, men can possess 100 grams of gold in the form of ornaments and jewellery irrespective of their marital status. Further, women can keep gold from 250 grams to 500 grams. For married women, the limit is 500 grams, and for unmarried women, it is 250 grams.
However, if you sell your gold within 3 years of purchasing, a short-term capital gain tax will be assessed on it by the government. And if you sell the gold beyond the 3-year limit, you have to pay a long-term capital gain tax.
Digital Gold
Another type of gold that individuals possess is digital gold, which is more profitable in terms of ROI compared to physical gold. Based on their digital gold purchase, individuals only have to pay GST @ and other small fees while buying.
As per the law, digital gold has no purchase upper limit. Individuals can spend up to ₹2 lakhs in a single day on digital gold purchases. Further, digital gold has no short-term gain tax for less than 3 years. However, one needs to pay long-term capital gain tax at a rate of 20%.
Sovereign Gold Bond (SGB)
Indian citizens are only allowed to invest a maximum amount equivalent to 4 kg per year in gold investment plans like Sovereign Gold Bond (SGB). Moreover, the holdings used by banks and other financial institutions as collateral will be excluded from the investment portfolio.
The interest rate received by an SGB is 2.5% per year, which is added to the taxable income of the buyer. But after eight years, the Sovereign Gold Bonds became tax-free.
Further, no outward cost is associated with the purchase of SGB, as you do not have to pay any GST on them.
Gold ETFs and Mutual Funds
Lastly, we have Gold ETFs and mutual funds. If the Mutual funds and Gold ETFs are kept for more than 3 years, individuals need to pay long-term capital gain tax on funds when selling.
Final Thoughts
Investing in gold can be a wise decision, but knowing the right quantity of this valuable metal to keep at home is critical. It will help you understand your tax liabilities and keep you on the right side of the law.
We have discussed the gold limit in India, along with answers to whether or not it is a good idea to consider gold investment plans. We hope it answers all your doubts and helps you make the right decision.
