Gold buyers alert! Know these Income Tax rules to avoid trouble
Income Tax department can't ask about the gold possession up to 500 gms from a married woman, for an unmarried woman this limit is 250 gms.
Keeping physical gold, jewelry and silver bars at home has been a culture in India. Some people believe that keeping gold at home can help them fight against inflation. However, there are some income tax and Central Board of Direct Taxes (CBDT) guidelines which investors should be aware of to avoid any embarrassment.
Asked about the ceiling on gold that one can keep at home, CBDT circular and Income Tax norms in this regard Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "There is no ceiling on how much a person can keep gold or jewelry at home. However, they must have the source of that gold (both physical and jewelry) after a certain limit."
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Jhaveri said that a woman who is unmarried, can keep up to 250 gms of gold at home and an Income Tax official or department won't ask about that much of gold possession at home. In the case of a married woman, this gold limit is 500 gms. Jhaveri said that the relaxation is given to the men also. If a man has 100 gm gold at home then the income tax department won't ask for the source of gold from that man.
Speaking on the CBDT norms that allows a person to keep gold (both physical and jewelry) beyond the above-mentioned limit Jitendra Solanki, a SEBI registered tax and investment expert said, "To keep gold beyond the given limit by the Income Tax Department, one needs to keep the source of the gold and gold jewelry."
Solanki said that earlier it was not required to keep the source of gold and gold jewelry but after the 11th May 2016 CBDT circular, one needs to keep the source of gold and gold jewelry if it goes beyond the given limit by the income tax department. He said that there are some myths related to gold preservation also.
For example, if you have a diamond ring, then it would be the weight of a diamond that has to be kept in one's account, not the whole ring because a diamond has no ceiling. So, actual weight is the weight of gold only. He suggested jewelry owners get all their jewelry assessment being done through a registered goldsmith. He advised gold and gold jewelry owners to keep a list of their gold and gold jewelry, their weight assessed by the registered goldsmith so that they can know exactly how much gold they have at home.