Gold Limit for Individuals in India

Today we take up the million dollar question when it comes to buying Gold. It is – “How much Gold you can legally hold? or What is Gold Limit?”

The question has assumed much importance in recent times with changes in income tax laws as well as the government’s endeavor to unearth black money.

Well, the post reveals a Gold limit for individuals in India. So, you come to know how to remain legally correct when you buy Gold.

The good news for you is that you don’t have to worry about your Gold purchases as long as you can explain the source of your investment in Gold.

In fact, the CBDT or Central Board of Direct Taxes has clarified in its press release dated 1st December 2016 that there is no limit on the holding of Gold (jewelry or ornaments) by anybody, provided that he/she can explain the source of such investment.

It means that if the investment is not in line with the income level as declared in the past tax returns, then the tax officials can confiscate the Gold jewelry.

However, it has been clarified by CBDT that Gold jewelry/ornaments to the extent of below-mentioned limits will not be seized even when it is found that there is disproportion in the income records of the assessee.

The Gold limit declared is as follows:

• 500 grams of Gold is allowed for married lady
• 250 grams of Gold is allowed for an unmarried lady
• 100 grams of Gold is allowed for a male member

Moreover, it has been clarified that the tax officials (conducting a search) have got the discretion they shall not seize any higher quantity of Gold jewelry/ornaments considering factors such as family customs and traditions.

So, the basic point to understand is that your investment in Gold jewelry/ornaments should be in line with your income as declared in your tax returns. It means that as long as you can explain the source of your investment in Gold, you have no reasons to worry.

Even the Finance Ministry has clarified that “legitimate holding of jewelry up to any extent is fully protected.”

So, your Gold jewelry or ornaments should be acquired from explained sources of income, including inheritance.

Even in the cases when Gold does not match your income, the Gold jewelry, and ornaments to the extent of:

• 500 gm for married lady
• 250gm for an unmarried lady
• 100gm for a male member

Will not be seized as declared by the government.

It has been further clarified by the IT Department (CBDT) that, “legitimate holding of Gold jewelry up to any extent is fully protected.”

What’s the Government Clarification on Gold Limit?

The Government has clarified that the apprehension regarding Gold holding (jewelry/ornaments) out of disclosed sources or exempted income shall be taxed under the proposed Taxation Laws (Second Amendment Bill, 2016), is totally unfounded and baseless.

It has been made clear that the above Bill will not introduce any new provision regarding chargeability of tax on jewelry.

The Bill only seeks to increase the applicable tax rate under section 115BBE of the Income-tax Act, 1961 from the present 30% to 60% plus a surcharge of 25% and cess thereon. This rate of tax will be charged in case of unexplained investment in assets.

So, it has been clarified that the Gold/jewelry that has been purchased out of disclosed income or even out of exempted income such as agricultural income or reasonable household savings or legally inherited shall not be chargeable to tax under the existing provisions or under the proposed amendment.

Further, no seizure of Gold jewelry and ornaments will be made during search operations to the extent of:

• 500 grams per married lady
• 250 grams per unmarried lady
• 100 grams per male member of the family.

Plus, legitimate holding of Gold jewelry is protected up to any extent.

So, the Gold jewelry acquired out of disclosed sources or exempted income shall not become taxable under the proposed amendment.

How much Gold can one bring to India from Dubai?

Dubai is called the “City of Gold” and is regarded as Gold-buyers paradise. People prefer to buy Gold from Dubai as it is a “tax-free” haven. So, you don’t have to incur VAT or sales tax costs when you buy Gold from Dubai.

The Indian Government allows all male passengers who are coming back to India from Dubai to bring Gold jewelry up to 20 grams that should not exceed more than 50,000 Indian rupees as a duty-free allowance.

However, female passengers are allowed to bring 40 grams of Gold jewelry and the cost of which should not exceed more than Rs. 1,00,000.

Moreover, there is no as such as restrictions applicable to passengers coming to India from Dubai if they declare their Gold jewelry at the customs and pay to the government import duty of 36 percent.

It has also been stated that the Central Board of Excise and Customs (CBEC) is working on a new set of guidelines that will ensure hassle-free customs clearance for passengers coming to India and carrying Gold jewelry for personal use.

How much Gold can a traveler bring into India?

Here, we take up the Gold import requirements into the country. We will answer questions such as:

• How much quantity of Gold are you allowed to bring?
• Can you carry Gold coins or biscuits?
• How much is duty-free?
• What’s the duty to be paid?

So, let’s begin.

• An Indian male passenger can bring duty-free Gold jewelry worth Rs. 50,000
• For the female passenger, the limit is Rs. 1 lakh
  (Note: The passenger needs to reside abroad for a period of more than a year. Gold jewelry over this limit is subject to customs duty.)
• One can import Gold bars and coins up to the limit of 1Kg per passenger once the customs duty is paid
• The Gold bars should be inscribed with the serial number, weight and the name of the manufacturer
• A percentage of duty tax is levied depending on the Gold bar that you have purchased
• You need to declare your Gold and pay the duty tax in India
• If you bring Gold bars or coins to India, then you need to pay customs duty at six percent (ad valorem) as well as three percent as cess
• If you carry tola bars and ornaments, the customs duty is charged at 10 percent (ad valorem) as well as 3 percent as cess.
• However, if you stay for less than one year, then the customs duty charged will be 10.3 percent. If the stay is for six months or less than six months, then the charge is 36.05 percent duty

So, you need to declare the Gold on arrival in India and pay the duty. If you are carrying Gold jewelry in excess of your duty-free limit, then you cannot use the “green channel” that is meant for passengers that do not have any dutiable products. Instead, you need to walk through the “red channel” as you have dutiable goods.

Concluding

So, now you know what the Gold limit is for individuals in India. We have dealt with the Gold restrictions when you travel to India from abroad. We have listed Indian custom rules for Gold. Plus, we have shared with you how much Gold you can bring to India from Dubai.

We hope that this article on Gold Limit proves useful to you. Thanks for visiting. We request you to share the post across popular social networking channels. We welcome your comments and suggestions.