Gold holding rules in India explained amid price surge

As gold prices surge amid rising geopolitical tensions, investors are keen to procure as much gold as they can afford, expecting prices to continue rising so they can sell later at a profit. However, there is often confusion about how much gold an individual can legally hold in India.

Contrary to popular belief, there is no legal cap on gold ownership in the country. What matters is whether the source of the gold can be explained and properly documented.

As per the 11-05-1994 circular issued by the Central Board of Direct Taxes, certain quantities of gold jewellery and ornaments shall not be seized during an income tax search, even if the source is not immediately explained.

The limits are as follows:

• Married woman – up to 500 grams

• Unmarried woman – up to 250 grams

• Male member – up to 100 grams

These limits are not ownership restrictions. Individuals may hold higher quantities of gold, provided they can satisfactorily explain the source of acquisition.

In the case of inherited gold, any quantity may be held if supported by valid documents such as income tax returns, purchase invoices or other acceptable evidence. The same norms apply to gold received as a gift, subject to proper documentation and disclosure.