Income Tax News: In Indian culture, gold has always been valued highly. We, Indians have a strong affinity for gold, which extends beyond its use as a typical wedding gift to its popularity as an investment. A lot of families purchase gold ahead of schedule for their children’s weddings and store it safely at home. Women especially like to wear gold jewellery. However, it’s critical to understand the legal restrictions on the amount of gold you can keep in your house without raising red flags with the Income Tax Department.
Legal Limits on Gold Storage at Home
You are only allowed to keep a certain amount of gold at home without having to disclose its source to the Income Tax Department, according to the Central Board of Direct Taxes (CBDT). These limits let families own gold within reasonable constraints while still preventing tax avoidance. Below is a summary of the acceptable bounds:
- Unmarried Women: Can keep up to 250 grams of gold.
- Married Women: Can store up to 500 grams of gold.
- Unmarried Men: Allowed to keep up to 100 grams of gold.
- Married Men: Also limited to 100 grams of gold.
If you adhere to these limits, the Income Tax officials cannot confiscate your gold jewellery during a search.
Tax Implications on Gold Investments
Physical Gold: When selling physical gold, the tax implications depend on the holding period:
- Short-Term Capital Gains (STCG): If sold within 3 years of purchase, the gains are added to your income and taxed as per your applicable income tax slab.
- Long-Term Capital Gains (LTCG): If sold after 3 years, a 20% tax is levied with the benefit of indexation.
Digital Gold: This modern investment option has different tax rules:
- Short-Term Capital Gains: Not applicable.
- Long-Term Capital Gains: A 20% tax is imposed with indexation benefits if held for more than 3 years.
Sovereign Gold Bonds (SGB) and Other Investments
Investing in Sovereign Gold Bonds (SGB) is another popular method. SGBs offer several advantages:
- Maximum Investment: You can invest up to 4 kg of gold per year.
- Interest: Earns an interest rate of 2.5% per annum, which is taxable.
- Tax Exemption: The principal amount is tax-free if held until maturity after 8 years.
- GST: No Goods and Services Tax (GST) on SGBs.
Gold ETFs and Mutual Funds: These are treated similarly to physical gold for tax purposes:
- Long-Term Capital Gains: A 20% tax applies if held for more than 3 years.
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited or it’s writer never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)
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