Gold Ownership In Families: How Much Can Each Member Keep Without Facing Tax Scrutiny?

Married women can hold up to 500 grams of gold without proof.

Gold has long been a symbol of wealth and status in households and its popularity continues to grow, despite rising prices. While there is no law in India that outright limits how much gold an individual can buy or own, the Income Tax Department has issued specific guidelines under which family members are expected to maintain records and declare their holdings.

The Central Board of Direct Taxes (CBDT) first issued these guidelines in 1994, outlining recommended limits for different family members. These limits act as a threshold: exceeding them is not illegal per se, but individuals must be able to prove the source of their gold. Failure to do so could result in the seizure of gold or jewellery.

Unmarried Daughters: According to CBDT guidelines, an unmarried woman can hold up to 250 grams of gold or gold jewellery without furnishing any proof of purchase or income. If her holdings exceed this limit, she must provide documentation proving the source.

Married Women: The limit for married women is 500 grams, effectively doubling that of unmarried daughters. Any gold above this threshold requires proof of purchase or source of income to avoid scrutiny.

Men: The guidelines are stricter for men. Both sons and husbands are allowed up to 100 grams of gold without showing documentation. Holdings beyond this limit need to be justified with proper receipts or evidence of income.

Family Holdings: For a typical nuclear family of four, this translates into a cumulative limit of 950 grams – 500 grams for the wife, 250 grams for the daughter, and 100 grams each for the husband and son. Any amount beyond this requires proof of the source, failing which the Income Tax Department may intervene.

While these limits are guidelines rather than strict legal caps, they serve as a reference for households and jewellers alike, ensuring transparency in the purchase and storage of gold.