Will Gold Holdings be Taxed?

13 Dec Will Gold Holdings be Taxed?

Will Gold Holdings be Taxed? All Your Queries Answered Here.

If you can satisfactorily explain the source of income, then you can hold any amount of gold without being taxed.

How will the government know how much gold I have?

The tax department has the right to conduct searches if it has information or reason to believe that a person is in possession of undisclosed money, bullion, jewellery, etc. If any gold or jewellery is found and the person can’t explain the source, it is liable to tax.

Will my gold be taxed?

In case you are not able to explain the source of income for purchase of gold in your possession, it would be liable for tax. However, if you can justify that it was purchased from disclosed income, exempted income, or out of reasonable household savings, it may not be taxable.

How much tax will I have to pay?

According to the proposed amendment, the tax on undisclosed/unexplained income is proposed to be 60 per cent, which would be further topped with 25 per cent surcharge on such tax, and education cess of three per cent. In addition to the tax, surcharge and cess (77.25 per cent), a penalty of 10 to 60 per cent would be applicable, depending on the circumstances.

What kind of documents should I show to explain the source of my gold?

You will need the purchase invoice to quantify the investment. Further, the amount invested should be explained by the source of income.

If I can explain the source of my gold, then can I hold any amount of gold without being taxed?

Yes. If you can satisfactorily explain the source of income, then you can hold any amount of gold without being taxed.

Will my gold holdings of over 500 gm be seized?

During search operations, no seizure of gold jewellery and ornaments to the extent of 500 gm per married lady,

What happens if it is not inherited gold, but I don’t have receipts to prove that I purchased it?

In such a scenario, the amount of gold commensurate with your savings or disclosed income would still be protected. However, gold which does not match your explained source of income would be liable to tax.

If I have two unmarried daughters, can I show 250 gm gold in each of their names?

The limit of 250 gm or other limits are derived from instruction number 1916, which asks taxmen not to seize certain limit of gold during a search procedure. However, if you are not able to explain the source of income for purchasing such gold, you would be liable for tax even if the gold is within the prescribed limits of instruction number 1916.