Gold limit: Limit for keeping gold jewellery at home, know the income tax rules

Breaking News, Digital Desk- (Gold limit) Buying gold is a cultural tradition for families in India. It is considered auspicious during festivals and weddings. 

Some consider it a symbol of prosperity, while others see it as an investment for a secure future. Whether you wear gold jewellery or store it, it has a special significance in Indian homes. But do you know how much gold you can keep at home? Is there any legal limit to keeping gold at home? Know the legal rules related to gold here.

Legal limit for keeping gold at home-

Under the income tax rules of India, there are certain guidelines regarding the quantity of gold that can be kept by a person to avoid the eyes of the authorities. The gold storage limit in India is decided by the Central Board of Direct Taxes (CBDT). CBDT has told how much gold you can keep.

In India, there is no set limit on how much gold a person can keep at home without any legal problems. The Income Tax Department has not set any specific limit in this regard. 

However, if you are found to have undeclared assets or gold more than your income, you will have to provide proof of the source and purchase of that gold. There will be no problem if you submit valid proof. So, more than the quantity of gold, its legal source is important.

Is there tax on inherited gold?

People often have a question about inherited gold, is it taxable? Or do we have to provide proof of inherited gold to tax officials? 

According to the government, inherited gold or gold purchased from declared income or tax-free income, as long as it is within the legally prescribed limit, there is no tax liability on it.

If you have inherited gold, there is no tax applicable on it until you decide to sell it. However, if the gold is more than the prescribed amount, you will have to submit receipts or documents such as proof of the gold being inherited by you through a will or legally. 

If you fail to provide these documents, there may be confiscation or penalty during a tax audit, especially when the gold is much more than the prescribed limit.

Is there tax on selling gold?

You do not have to pay tax for keeping gold at home, but selling it creates tax liability. Here first of all Long Term Capital Gain Tax is levied, which will be applicable on the income earned from selling gold. 

If you sell gold after keeping it for three years or more, then Long Term Capital Gain Tax is levied on the profit made from selling gold at the rate of 20%.

If you sell the gold within three years, the profit will be added to your income for that year and will be taxed as per your personal income tax slab. 

For example, if you held the gold for just two years and sold it, the income from it will be included in your total income and will be taxed as per your slab. However, if you sell after three years, you will get the benefit of indexation, which will reduce the tax amount.