There is no direct restriction on the quantity of gold an individual can hold at home. However, during income tax raids, individuals must justify the gold they possess. The government has provided guidelines to tax officers: married women can hold up to 500 grams, unmarried women up to 250 grams, and men up to 100 grams of gold without any need for justification. Larger quantities of gold are allowed if you can provide legitimate documentation, such as bills, inheritance records, or tax returns, demonstrating the gold’s acquisition through declared income or other lawful means.
What is the gold storage limit per person in India?
The gold storage limit per person in India varies based on gender and marital status. Married women can legally store up to 500 grams of gold, while unmarried women are allowed up to 250 grams. Men, regardless of their marital status, can keep up to 100 grams. These limits are primarily applicable when income tax authorities conduct raids, allowing them to identify acceptable amounts of personal gold holdings. If you possess more than the allowed limit, you must provide documentation to verify that the gold has been legally acquired. There are no penalties for exceeding these limits if proper documents are in place.
Limits and income tax rules on the storage of different types of gold
Gold can be stored in various forms, including jewellery, coins, and bars. Indian tax authorities primarily focus on the source and documentation of the gold you store, not the form it takes. Married women are permitted to hold up to 500 grams of gold jewellery, while unmarried women can store 250 grams, and men can possess 100 grams without question. However, if you own coins or bars, the rules remain the same – the key concern is providing proof of legitimate acquisition. If you exceed these limits, clear records of purchase or inheritance must be presented during an income tax audit to avoid penalties.
How is gold taxed in India?
Gold in India is taxed based on its nature and the holding period. When selling gold, if held for less than three years, it falls under short-term capital gains (STCG) and is taxed according to your income slab. For gold held for more than three years, it is classified under long-term capital gains (LTCG), and a flat tax rate of 20% is applied after indexation benefits. When receiving gold as a gift or inheritance, no tax is levied, but the recipient may have to pay capital gains tax when selling it. Additionally, purchasing gold attracts Goods and Services Tax (GST) at 3%.
Is there a limit to how much gold I can buy in India?
There is no specific legal limit on how much gold an individual can purchase in India. However, purchases above ₹2 lakh require PAN card details to be provided, as per the government's regulations. Large transactions are subject to scrutiny by the income tax department to ensure that the money used for the purchase is accounted for and declared in income tax returns. Although buying gold in significant quantities is allowed, individuals must ensure that their transactions are transparent and recorded to avoid any legal complications during tax assessments.
How much gold is allowed at home without a tax penalty?
The government allows individuals to hold a certain amount of gold without facing any tax penalties. Married women can keep up to 500 grams of gold, unmarried women up to 250 grams, and men up to 100 grams. These limits are primarily applicable in the context of income tax raids. However, exceeding these limits is not necessarily illegal, provided you have valid documentation, such as purchase receipts or proof of inheritance. If you cannot justify the gold’s acquisition, it may be considered undeclared income, leading to penalties during an income tax assessment.
Using gold stored at home for a gold loan
Gold stored at home can be used as collateral for a gold loan, providing easy access to liquidity without selling your asset. Gold loans are typically offered by banks and non-banking financial companies (NBFCs). The loan amount is determined by the current market value of the gold and its weight. Financial institutions usually offer up to 75% of the gold’s market value as a loan. You can secure funds without selling your gold and repay the loan over a flexible term, retaining ownership of the gold once the loan is repaid.
Can I get a gold loan without selling my gold?
Yes, you can obtain a gold loan without selling your gold. Gold loans are secured loans where your gold acts as collateral. The gold remains in the possession of the lender until the loan is repaid, but you do not lose ownership of it. Once you repay the loan, the gold is returned to you. This allows you to access funds quickly without parting with your gold permanently. Many banks and NBFCs in India offer this facility, and the
loan amount is determined by the weight and purity of the gold.
How to calculate a gold loan per gram for gold at home?
The calculation for a gold loan per gram is based on the market value of gold on the day you apply for the loan. Financial institutions offer a loan-to-value (LTV) ratio, which can go up to 75% of the gold’s market value. For example, if the market value of gold is ₹5,000 per gram and the lender offers an LTV of 75%, you can get a loan of ₹3,750 per gram. The value also depends on the purity of the gold, with 22-karat and 24-karat gold fetching different loan amounts.
Is it safe to keep gold at home for future loans?
Keeping gold at home can be convenient for securing future loans, but it is not always the safest option. Gold stored at home is vulnerable to theft, loss, or damage. If you plan to use gold for future loans, it might be wiser to store it in a bank locker or a secure facility. Bajaj Finance offers gold loans against securely stored gold, reducing the risk of keeping large quantities of gold at home. While it is possible to keep gold at home for loans, prioritising security is essential to safeguard your asset. With Bajaj Finserv Gold you can avail a gold loan of up to Rs. 2 crore with various benefits, making it a great financing option.
