OIn India, gold is more than just a precious metal. It stands for many different things, including customs, love, and traditions. However, despite the fact that Indians adore holding gold, it is unclear how much gold can be kept by an individual, including that which was inherited and bought.
On December 1st, 2016, the CBDT provided a clarification to allay the concerns. The preceding directives for income tax officers on the seizure of gold jewelry and gold ornaments during an income tax raid, which were issued on May 11, 1994, are reiterated in this circular.
No upper limit to gold holdings
This circular indicates the maximum quantity of gold that may be seized, but it makes no mention of the ceiling or maximum amount of gold that an individual may acquire. As a result, even though the maximum amount of gold may be confiscated, you may still be requested to provide proof of its source.
There is no upper restriction on how much gold you can own if you obtained it via the mentioned sources of income, including inheritance. However, the amount of gold you are holding should be reflected in your ITR.
It’s also suggested that you save the receipt for your transaction. Keep a copy of the exchange invoice together with the invoice for the original purchase if you exchange gold jewelry.
It is recommended to preserve a copy of the will in case of inheritance. It serves as documentation of your inheritance. It is simpler to determine how much gold you have inherited if the person you acquired it from was a wealth tax payer.
The wealth tax has been eliminated, however up to the end of March 2015, you were still required to file a return and reveal your wealth if it exceeded Rs. 30 lacs. Therefore, if you stated your possession of gold in your wealth tax return, your ownership will be confirmed, and you can keep the gold.
What if you are unable to identify the origin of your gold?
According to the CBDT circular, a married woman may own up to 500 grams of gold jewelry, an unmarried woman may own up to 250 grams, and a male family member may own up to 100 grams of gold ornaments and jewelry.
It includes both inherited and newly purchased gold jewelry within the aforementioned upper limit. You won’t have your gold jewelry seized even if you don’t have the necessary documentation. However, it excludes gold bars and coins. Even if the amount is less than the above-mentioned maximum, the gold coins and bars may still be seized.
Depending on the circumstances, the officer in charge may decide not to seize the gold if you have more gold than the amount mentioned above and you can explain where it came from.
The gold that you might be keeping on behalf of someone else is not included in this limit. Because of this, if there is a raid at your home and you are holding someone else’s gold, it will not be included in the above limit and may be seized.
For illustration, if your family consists of four people—a married woman, an unmarried woman, a married man, and a single male—the total quantity of gold that will not be seized is equal to
500 grams Married Female
Female Single 250 gram
100 grams Married Male
Male, unmarried, 100 gm
950 g total
