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ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
In India, there is no legal limit on owning gold, but specific tax rules apply based on the amount and type of gold, requiring proof of income for larger holdings.
Owning gold in India is a cherished tradition, deeply rooted in the cultural and economic fabric of the country. Gold is not only valued for its beauty and status but also for its role as a secure investment.
Understanding gold ownership’s legalities can be challenging due to various regulations and tax implications. However, it is important to know the details of the tax laws pertaining to gold ownership to avoid any legal troubles.
India has no legal gold limit for how much gold you keep at home, be it jewelry, coins, or bars. However, there are regulations regarding the amount of gold you can possess without providing proof of income during a tax assessment.
The Central Board of Direct Taxes (CBDT) outlines these gold buying limits in India, which vary based physically possessed women can hold up to 500 grams of gold, unmarried women have a limit of 250 grams, and married or unmarried men are allowed 100 grams. It is important to remember that these are limits for unaccounted gold. If you can demonstrate legitimate income sources for your gold purchases, you should not face any tax issues on how much gold can be kept at home, regardless of the quantity.
In India, there is no absolute restriction on the amount of gold you can hold, but tax regulations play a significant role. But how much gold can you keep at home?
Physical gold refers to the tangible form of this precious metal, commonly available in coins, bars, or jewelry. Unlike paper or digital representations of wealth, physical gold provides individuals with a concrete and enduring asset valued for its beauty, rarity, and intrinsic worth throughout human history.
One of physical gold’s distinctive qualities is its historical significance. Across civilizations and centuries, gold has symbolized wealth, power, and luxury. It has been used as currency, adornment, and a store of value. Even in the modern era, physical gold maintains its allure, connecting investors to this precious metal’s enduring legacy.
Digital gold is an investment that allows individuals to own and trade gold in electronic or digital format, eliminating the need to possess the precious metal physically. This innovative financial instrument leverages technology to provide investors a convenient and accessible way to participate in the gold market.
Individuals can only invest a maximum of 4 kg per year in SGB. The holdings used as collateral by banks and other financial institutions will not be included in the investment ceiling.
The purchase of sovereign gold bonds (SGBs) does not involve outward costs, as GST is not required. An SGB receives interest at 2.5% annually, added to taxable income and assessed according to the applicable slab. However, after eight years, SGB profits are tax-free.
LTCG applies to mutual funds and gold ETFs when held for more than three years. For investments made for less than three years, the rate is the same (20% plus 4% cess), and the gains are applied to your taxable income and taxed according to your IT slab.
The expenses, minimum and maximum limitations, and tenure times of various gold investment products vary. Therefore, before investing, exercise due diligence.
Gold, often hailed as a symbol of wealth and prosperity, is significant in the financial world. As individuals buy, sell, and exchange gold for various purposes, understanding how gold is taxed is crucial for making informed financial decisions.
The Goods and Service Tax (GST) is applied at 3% on acquiring gold and 5% on the associated making charges. In the case of exchanging gold items such as bars or coins for new jewelry, no additional GST is imposed up to the weight equivalent to the exchanged gold (bars or coins). GST only applies to the value exceeding the weight of the exchanged gold.
It is important to note that no GST is levied on the outright sale of gold.
Receiving gold in the form of jewelry, bullion, Gold Exchange-Traded Funds (ETFs), or Gold Mutual Funds (MFs) as a gift becomes taxable if the aggregate market value of the received gold exceeds ₹50,000. The taxation is categorized under the ‘Income from other sources’ and is subject to applicable slab rates based on your income bracket.
Nevertheless, certain exemptions from taxation are provided by the Act in specific circumstances:
A short-term capital gains tax will be assessed if you sell the physical gold within three years of purchasing it; if you sell it beyond that time, a long-term capital gains tax will be assessed. The short-term capital gains will be taxed at the income tax slab rate and added to the total taxable income. Meanwhile, the cost of purchasing digital gold has no upper limit. However, you can only spend up to ₹2 Lakh on gold daily.
Long-Term Capital Gains Tax (LTCG) for physical and digital gold is payable at a 20% + cess and fee rate when selling digital gold after three years. Returns on digital gold, however, are not immediately taxable if kept for less than three years.
Selling gold can be profitable but may incur capital gains tax. Here are some ways to potentially save on Long-Term Capital Gains (LTCG) tax from selling gold in India:
When it comes to gold, a little foresight goes a long way. Here are some essential precautions to keep in mind:
Owning gold at home is a common practice, and while there are no strict limits on jewelry, there are guidelines for gold coins and bars. Understanding the income tax rules related to gold ownership is crucial to ensure compliance and transparency in financial matters. It is advisable to stay updated on any regulation changes and consult with financial experts for the most accurate and current information regarding gold ownership and income tax implications.
The general public has always been satisfied when investing in gold because it is precious. Different gold investments vary in expenses, tenure times, and minimum and maximum limitations. Therefore, it becomes essential to conduct thorough research and analysis before making the decision to invest in gold.
1
In India, you can legally own any amount of gold. But, tax authorities might ask about the source of income if you hold a lot of gold (without proper documentation) - limits are:
2
The amount of gold you can bring duty-free depends on gender and residency status. Here’s a breakdown:
3
The amount you can bring duty-free depends on your residency status and how long you have been abroad. Women and children over 2 years old (who have lived abroad for over a year) can bring up to 40 grams of gold jewelry, while men get 20 grams (both with value limits). Exceeding this or bringing coins/bars? Declare it and pay duty. There’s also a total 1 kg limit per person.
4
Yes, you can buy more than ₹2 lakh worth of gold in India. However, there are a couple of things to consider:
5
In India, you can keep 1 kg of gold at home. There’s no legal limit on the total amount of gold you can own, whether it’s jewelry, coins, or bars
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
