A widespread myth among Indians is that the gold that they can hold at home, which could be for various personal reasons, is beyond the jurisdiction of the Income Tax Department and Enforcement Directorate (ED).
But, people don't know that they cannot wash-off their hands by just saying it's woman's wealth. The Central Board of Direct Taxation (CBDT) has clarified on the prescribed quantity of gold considered "allowable." Gold within the limit will not be seized even at the time of search at the assessee’s premises.
According to tax experts, if you can explain the source of investment in gold, you do not have to worry.
The Central Board of Direct Taxes (CBDT) has specified in its press release, dated 1 December 2016, that there is no limit on holding gold jewellery provided that the source of investment or inheritance can be explained.
Speaking to Zee Business on how much gold you can keep at home, Mumbai-based tax and investment expert Balwant Jain said, "As per norms, the income tax officers have been advised not to seize and take away gold ornaments, up to a 500 gram limit, belonging to a married lady. The limits prescribed for an unmarried female in the family are lower at 250 grams. However, for a male, whether married or unmarried, a lower limit of 100 grams each are prescribed. Let us understand the implications of this circular and the care one should take in respect of gold owned by them."
Acceptable quantity of gold:
- A married woman can have up to 500g of gold.
- An unmarried woman can have up to 250g of gold.
- A man can have up to 100g of gold.
What proof is valid?
Proof of investment will help you in establishing the source of the investment against your income tax return. Apart from the tax invoices that you would keep, you may wonder what kind of proof is necessary in case of inheritance and gifts. In the case of inheritance or gift, you can provide a receipt in the name of the initial owner of the item or can submit a family settlement deed, will, or a gift deed stating the transfer of such commodity to you.