Gold Limit at Home: Income Tax Department will send notice to those who keep gold beyond the limit at home
Gold Limit: When buying gold this festive season, it’s important to know how much gold can be legally stored at home. Learn about limits, tax rules, penalties, and the full details of investing in digital gold, SGBs, or ETFs.
Gold Limit: The festive season is often a time to buy or invest in gold. However, many people have questions when buying gold. These include how much gold can legally be kept at home, whether there’s a penalty for exceeding the limit, storage rules, and when taxes are due.
How much gold can one keep at home?
No law directly limits how much gold a person can keep. However, you should be able to prove the source of the gold you own, especially for tax purposes.
If you possess more gold than the limits listed below, income tax officials may ask for documents and proof of income.
- Men (married and unmarried) – 100 grams of gold
- Unmarried women – 250 grams of gold
- Married women – 500 grams of gold
These limits are for the information of tax officials, so they can differentiate between legal and illegal gold. According to the CBDT, if the gold is purchased from declared income, inherited from family, and is within the limits listed above, it will not be taxable.
Do I need to declare the gold I keep at home?
No. As long as your gold is within the prescribed limit, there’s no need to declare it. Gold can be kept in any form, such as jewelry, coins, or bars. But always keep tax documents ready so you can show them when needed.
Will there be a penalty if you keep more gold than the limit?
Yes. Keeping gold above the limit will be considered hidden income. In this case, a tax penalty may be imposed. Such gold can also be confiscated during an income tax investigation.
Is gold kept at home tax-free?
Gold kept within the prescribed limit is not taxable. Tax is levied only at the time of purchase (3% GST) or sale (capital gains tax). If you cannot provide proper documentation for gold exceeding the limit, a penalty may apply.
If you sell gold within three years of purchase, short-term capital gains (STCG) tax will be applicable. Long-term capital gains (LTCG) tax will be applicable if sold after three years.
Limits for Digital Gold, Mutual Funds
Digital Gold: There is no purchase limit, but GST and small fees are applicable. Up to ₹2 lakh worth of digital gold can be purchased in a day. There is no STCG tax, but LTCG tax is 20%.
Sovereign Gold Bond (SGB): You can invest up to 4 kg in a year. Interest earned on SGB is added to your taxable income, but becomes tax-free after eight years. GST is not applicable.
Gold ETFs and Mutual Funds: LTCG tax is payable at the time of sale.
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