There is no legal limit for holding gold in India. But, for tax purposes, married women can keep 500g of gold, unmarried 250g and men can keep 100g of gold without disclosing the source. If it is more than this, heavy tax is levied for not declaring the source of income.
New Delhi: Prime Minister Narendra Modi has appealed to people not to buy gold for a year, so that the country’s economy can be strengthened by reducing non-essential imports. After this appeal, the rules related to keeping gold in India have once again come into discussion. Actually, there is no legal limit for keeping gold in India. But the Central Board of Direct Taxes (CBDT) has made clear guidelines regarding the quantity of gold to be seized during income tax raids.
According to CBDT rules, a married woman can keep up to 500 grams of gold. Whereas for an unmarried woman this limit is 250 grams. For men (married or unmarried) this limit has been fixed at 100 grams. The rule also says that jewelery within this limit will not be confiscated, irrespective of the income or social status of the family.
If someone has more gold than the prescribed limit, then exemption can be given in some cases. If you have given information about gold in your wealth tax return, you will get exemption. You can save money even if you tell the definite source of income from where you got the money to buy gold. Additionally, the authorities may permit retention of more gold at their discretion, considering family customs and traditions. But keep in mind, this discount is applicable only on jewelery and not on gold coins or gold bars.
Now the question arises that what will happen if you are not able to tell the source? If you fail to disclose the source of gold held with you, you may have to pay heavy taxes. According to a report by ClearTax, tax on such gold can be up to 78%, which includes 60% tax, 25% surcharge and 4% cess. Apart from this, a penalty of 10% can also be imposed on the tax amount. To understand in simple language, if you have solid documents and source of income, then you can keep any amount of gold. But, if unaccounted gold is caught, you may have to pay a heavy price for it.