Gold is a favourite article of possession particularly about ladies in India. People purchase gold for a variety of reasons such as for auspicious occasions or for the fond of wearing ornaments or for buying gold for daughter/son’s marriage in future.
On the other hand, gold also seems to be a favourite investment option for capital appreciation for many people given the fact that there is no restriction on how much gold an individual can hold. Here, gold includes not only jewellery but includes also gold coins, gold bars, and other forms. Gold possession is one of the most revered investments in India.
However, having gold beyond a certain limit can be problematic, if you don’t have its invoice. According to the Central Board of Direct Taxes (CBDT) guideline, there is certain limit beyond which gold without invoice can be quizzed under Section 132 of the Income Tax Act.
The Income Tax Department also says that if you buy gold, then you must mention about it in the asset details while filing your Income Tax Return (ITR) for that year. Speaking on how much gold one can possess without having its invoice Amit Gupta, MD at SAG Infotech said, “As per the Income Tax Department norms, a married lady can posses up to 500 gm gold without invoice while in the case of unmarried lady and male this limit is 250 gms and 100 gms respectively.”
The managing director of the SEBI registered tax solution firm went on to add that the law was made in December 2016 as there was a myth among Indians that they can hold unlimited quantity of gold without invoice. He said that for Income Tax Department gold means all forms of physical gold that includes gold jewelry, gold coins, bars, etc. On how to avoid income tax quizzing in regard to gold possession SEBI registered tax and investment expert Jitendra Solanki said, “In India, one gets gold from ancestors without invoice.
So, it’s important for them to know how much gold without invoice a household can poses. Being know to the limit, if there is any further addition of physical gold from ancestors or from any relative, then it’s advisable to mention about it in one’s asset details during ITR filing of that financial year.” Solanki advised gold possesses to get the valuation of the gold done immediately after getting it from ancestors or from any relative if the invoice is not there.
It will help them inform the income tax department about the asset details in regard to gold possession. Solanki added that having gold with invoice is not a problem provided the person has filled this in the asset details of one’s ITR. But, having known to the limit of physical gold without invoice is important because it varies from one household to other.