In India, gold ownership is a common practice, with many people holding gold in the form of jewelry, coins, and bars.
However, when it comes to the income tax rules regarding gold ownership, there are certain guidelines to be aware of, especially to avoid legal issues.
There is no specific limit on the amount of gold you can own in India. However, if the quantity of gold you hold appears excessive compared to your income, it may raise questions from the Income Tax Department
To prevent any issues, it’s important to maintain documentation or proof of the source of the gold, whether it is inherited, purchased, or received as gifts.
Jewelry and Gifts: If you receive gold jewelry as a gift, it is not taxable, but the giver may be subject to gift tax if the value exceeds a certain limit. As of now, gifts worth over Rs. 50,000 are taxable in the hands of the recipient under the Income Tax Act.
Capital Gains: If you sell gold for a profit, the gain is considered capital gain and taxed accordingly. If held for more than three years, long-term capital gains tax (LTCG) applies at 20% with indexation benefits
Wealth Tax: While wealth tax has been abolished in India since 2015, gold and other valuables are still considered while assessing your net worth for tax purposes.
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