Gold in India is more than just a shiny metal—it is a part of traditions, weddings, financial planning, and even sentiments passed through generations. While buying gold for occasions or as an investment is common, many people are unaware that there are specific legal limits for how much physical gold you can store at home. Exceeding these limits, as per the Income Tax Department’s rules, could lead to questions during searches or even unwanted penalties.
Legal Limits for Gold Ownership
The Central Board of Direct Taxes (CBDT) has set clear guidelines for how much gold individuals can hold without needing to explain its source:
- Married women can keep up to 500 grams of gold.
- Unmarried women are allowed up to 250 grams.
- Men, whether married or single, can possess up to 100 grams.
Gold within these limits is treated as permissible household holding and does not require proof of purchase or inheritance if checked during income tax searches.
Tax Rules on Selling Gold
Holding gold is one thing, but selling it comes under tax regulations based on the time and form of investment.
- Physical Gold:
If you sell within 3 years of buying, it is considered short-term, and the profit is taxed as per your income slab. If sold after 3 years, it attracts long-term capital gains tax at 20% with indexation benefits. - Digital Gold:
There’s no storage limit for digital gold. While short-term tax rules do not apply, holding for more than 3 years subjects it to a 20% long-term capital gains tax. - Sovereign Gold Bonds (SGBs):
Individuals can invest up to 4 kg of gold annually through SGBs. These come with a fixed 2.5% annual interest (taxable) and are entirely tax-free if held till maturity after 8 years.
By staying within the prescribed gold limits and following proper tax guidelines, you can continue investing in and enjoying the cultural and financial benefits of gold—without running into trouble with the authorities.
