Gold Limit: Gold has long been a cherished symbol of wealth and prosperity. It’s deeply rooted in our customs and is often considered to bring good fortune, especially during celebrations. Whether in the form of coins or jewellery, people love owning gold. However, while enjoying its beauty, it’s important to ensure its safety and follow the laws governing its ownership.
How Much Gold Can You Keep at Home?
The Central Board of Direct Taxes (CBDT) outlines specific rules for owning gold. Gold bought with declared income, exempted income (like agricultural earnings), or legally inherited money from explainable sources is exempt from tax. However, certain limits dictate how much gold you can keep without the risk of confiscation during searches.
Here are the permissible gold limits:
- Married women: Up to 500 grams
- Unmarried women: Up to 250 grams
- Married men: Up to 100 grams
- Unmarried men: Up to 100 grams
These limits apply to gold jewellery and ornaments. Anything beyond these amounts could potentially be confiscated during legal searches unless you can explain its source.
Gold as an Investment
Gold remains a popular investment, alongside mutual funds, SIPs (Systematic Investment Plans), and equities. Many people see it as a stable investment, especially in uncertain times. Physical gold, digital gold, and Sovereign Gold Bonds (SGBs) are some of the ways people invest in gold today.
Regulations Governing Gold Investments
Different types of gold investments come with different regulations, and it’s important to know the rules regarding ownership and taxation.
1. Physical Gold
As per CBDT guidelines, a married woman can own up to 500 grams of gold, unmarried women can hold up to 250 grams, and men (both married and unmarried) are limited to 100 grams without risk of confiscation.
When you sell physical gold:
- If sold within three years, short-term capital gains tax applies according to your income tax slab.
- If sold after three years, a long-term capital gains tax of 20% plus a 4% cess applies.
- An additional 3% GST is applied on gold purchases.
2. Digital Gold
Digital gold has gained popularity due to its ease of purchase and better returns compared to physical gold. There is no limit on how much digital gold you can own, but daily spending is capped at ₹2 lakh.
- Long-term capital gains tax of 20% applies when selling digital gold after three years.
- No taxes are applicable until withdrawal if held for less than three years.
3. Sovereign Gold Bonds (SGBs)
SGBs are another secure way to invest in gold, with a maximum limit of 4 kg per individual per year. These bonds offer 2.5% interest annually, which is taxable based on your income tax slab. However, after holding the bonds for eight years, your profits become tax-free.
4. Gold ETFs and Mutual Funds
If you hold gold ETFs or mutual funds for over three years, they are subject to long-term capital gains tax at 20%, plus a 4% cess. If held for less than three years, the gains are added to your taxable income and taxed according to your income tax slab.
