Will Gold Holdings be Taxed? | Next Level Education
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Will Gold Holdings be Taxed?

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.

Are you worried that the department could conduct a search on your personal holdings? Read the following FAQs to understand the issue:

How will the government know how much I have?

The 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 or jewellery is found and the person can’t explain the source, it is liable to tax.

Will my be taxed?

In case you are not able to explain the source of  for purchase of 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 will I have to pay?

According to the proposed amendment, the on undisclosed/unexplained 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 without being taxed?

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

Will my holdings of over 500 gm be seized?

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

250 gm per unmarried lady, and 100 gm per male member of the family shall be made. Legitimate holding of jewellery up to any extent is fully protected. even if exceeding the above limit would not be seized if it is from an explained source of which is duly taxed or exempt from tax.

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 commensurate with your savings or disclosed  would still be protected. However, which does not match your explained source of  would be liable to tax.

If I have two unmarried daughters, can I show 250 gm 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 during a search procedure. However, if you are not able to explain the source of for purchasing such gold, you would be liable for even if the is within the prescribed limits of instruction number 1916.

Author: Amarpal Chadha, partner and India Mobility leader, EY
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