The Central Board of Direct Taxes (CBDT) has cleared the air on a question many Pune households quietly fret over: how much gold jewellery you can own before risking seizure during income tax searches.
What’s Allowed (Without Documents)
- Married women: up to 500 gms
- Unmarried women: up to 250 gms
- Men (any marital status): up to 100 gms
If your jewellery falls within these limits, the tax authorities cannot confiscate it during a raid—even if you don’t have purchase bills.
Beyond the Limit? Not Illegal—but Be Ready
Owning more than the above isn’t automatically unlawful. But during scrutiny, you’ll need to prove the source — through purchase invoices, inheritance papers, or gift deeds. Tax officers may choose to seize excess jewellery if explanations aren’t satisfactory or don’t match your income profile and family traditions.
Why These Rules Exist
These safe-harbor thresholds stem from a 1994 CBDT circular designed to prevent arbitrary jewellery seizures during income tax raids — especially to protect long-held family ornaments. The rule acknowledges that gold holds deep cultural and emotional value in Indian households, particularly for women.
What Happens When You Sell Gold
- No tax on simply holding gold — only when you sell it.
- If sold within 2 years, profits are taxed as short-term capital gains under your income tax slab.
- If held for over 2 years, gains are taxed at a flat 12.5 % as long-term capital gains.
Takeaway for Pune readers: Keep your jewellery within those safe limits — or keep solid records. It’s not just tradition protecting your gold — it’s paperwork.
