Gold is often bought or gifted during various rituals after birth and is considered an essential part of a woman’s adornment.
But do you know how much gold women can legally keep at home? How much can be stored in a bank locker? And what happens if you exceed the prescribed limit?
As per the rules of the Central Board of Direct Taxes (CBDT), different limits have been set for men and women to store gold at home.
If you keep more gold than the specified limit, you must provide valid proof of ownership, such as a purchase receipt.
Failure to do so may result in a heavy penalty.
Rule for Keeping Gold
If you store gold at home or in a bank locker without valid proof, you will be taxed at 78% under Section 69B and Section 115BBE of the Income Tax Act.
Additionally, a 10% penalty will be imposed. If you fail to provide proof, the Income Tax Department can seize all your gold.
Legal Limit for Keeping Gold
- As per CBDT rules, married women can legally keep up to 500 grams of gold.
- For unmarried women, the permitted limit is 250 grams.
- Men are allowed to keep only 100 grams of gold.
Tax on Inherited Gold
In many families, ancestral jewellery is passed down to women after marriage, known as inheritance gold.
If the gold is purchased from declared or tax-free income, or if it is legally inherited, no tax is applicable.
However, there is a set limit for keeping gold. If the gold exceeds this limit, you must provide valid proof to avoid penalties.
How much tax is payable on selling gold kept at home?
If you keep gold within the prescribed limit, no tax is applicable. However, if you decide to sell it, tax will be levied.
For instance, if you sell gold after holding it for more than three years, you will have to pay Long-Term Capital Gains (LTCG) tax at a rate of 20% on the profit earned from the sale.
You can earn money by depositing gold in a bank locker
SBI’s revamped Gold Deposit Scheme allows you to earn returns by depositing gold in a bank locker. The scheme has three categories:
Short-Term Bank Deposit (STBD) – Gold is deposited for 1 to 3 years.
Medium-Term Government Deposit (MTGD) – Gold is stored for 5 to 7 years.
Long-Term Government Deposit (LTGD) – The locking period ranges from 12 to 15 years.
This scheme was introduced in 2015 to help individuals earn interest on their stored gold.
By investing in this scheme, you can earn an annual interest of up to 2.50%. There is no maximum limit on the amount of gold you can deposit.
However, the minimum deposit required is 30 grams of gold. This means you can deposit any quantity above this limit and earn interest on it.
Rules for Sovereign Gold Bonds (SGB)
As per CBDT guidelines, if you sell a Sovereign Gold Bond (SGB) within 3 years, the profit earned will be added to your total income and taxed as per your applicable tax slab.
However, if you hold the gold bond until maturity, the profit you make is completely tax-free.
