Have gold at home? This is how much you can hold without informing Income-Tax department
Income tax alert: As per experts, one should have proper documentation of the source of gold at their home - no one is allowed to hold unaccounted gold beyond a certain limit.
Income tax: It's a myth that you can hold any amount of unaccounted gold at your home and that it is beyond the Income-Tax department and the Enforcement Department (ED) jurisdiction. You cannot wash-off your hand by just saying it's 'Stree Dhan' (woman's wealth). According to tax and investment experts, you should have proper documentation of the source of gold at their home - you just can't hold unaccounted gold beyond a certain limit, as per law.
Speaking on the limit you can hold unaccounted gold at home, Mumbai-based tax and investment expert Balwant Jain said, "As per norms, the income tax officers have been advised not to seize and take away gold ornaments belonging to a married lady up to 500 grams. The limits prescribed for an unmarried female in the family are lower at 250 grams. However, for a male whether married or unmarried a lower limit of 100 grams each are prescribed. Let us understand the implications of this circular and the care one should take in respect of gold owned by them."
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Highlighting what law says Jain explained, "At present, there is no law prescribing any limit up to which you can hold gold and jewelry. However, the Central Board of Direct Taxes (CBDT) in its circular dated 11-05-1994 instructed its officers not to seize gold ornaments and jewelry up to certain limits during the course of raids by income tax officials. There are separate limits for married man and woman as regards holding of gold jewelry."
Speaking on what does wealth mean for the income taxpayer, Sunil Garg, an independent tax expert said, "If someone has income below Rs 50 lakh, then they will have to file ITR-1 form which does not seek the details of an assessee's wealth. However, if your income is above Rs 50 lakh your income tax form will have a schedule asking for the details of your wealth that includes gold and jewelry. It has been found that people fill it in a casual manner and this, after some time, becomes a big problem for them. So, when your income goes past Rs 50 lakh per annum, you should make item wise list of your wealth including gold and jewelry."
Asked about the guidelines one can follow in regard to gold and jewelry, Garg said, "One must get the valuation done before he or she files the ITR. Generally, a person gets gold and jewelry through these sources — Purchase, marriage, paternal and gifts. So, keep the invoice for the gold or jewelry one has purchased. If the source of gold and jewelry is marriage, then list out who gifted which item. If the source of gold and jewelry is through the paternal source, make a will of the gold and jewelry. However, if the source is gift-based, have a gift deed to answer the income tax questions in the schedule of your ITR form."
"Even if the invoices are not available, but your drawings and income are sufficient to justify the accumulation of so much jewelry, you still have a better case to present to the taxman. Though wealth tax has been abolished recently, if you have ever filed your wealth tax returns for any year/s up to 31-03-2015 where these gold jewelry and coins and bars have been disclosed, the source of such items prima facie gets explained. I don't know what will the threshold limit for the disclosure scheme but in all probability, it will not be lower than the quantity specified in the circular," concluded Jain.