Gold Limit at home: If you sell your gold within 3 years of purchasing it, the government will levy short-term capital gains tax on it. Apart from this, if you sell gold after 3 years, you will have to pay long-term capital gains tax.
Gold Limit at home: There is no doubt that gold is considered the most precious metal in India. Almost every family in the country will have gold (even if in small quantities) in the form of jewellery, coins or investment schemes. Because in the country, apart from its financial value, gold is also considered a symbol of good fortune and wealth. But do you know that there is a limit for keeping gold at home.
According to the Central Board of Direct Taxes (CBDT), gold purchases made with reasonable amount of income and exempted revenue sources such as agricultural income, legally inherited money (which can be explained) and household savings. But no tax will be imposed. If the quantity of gold is under the limit, then the Income Tax official cannot take gold jewelery from your house during the search operation.
The per capita limit in the country is as follows. Unmarried woman: 250 grams. Unmarried men: 100 grams. Married woman: 500 grams. Married man: 100 grams.
Provision of tax on gold: People have ownership rights over gold in many ways. Let’s take a look at the limits and income tax rules applicable to different types of gold.
Tax on physical gold: According to the new circular of CBDT, men (unmarried or married) can keep up to 100 grams of gold in jewelery or physical form. Apart from this, women can keep gold from 250 grams to 500 grams. For married women this limit is 500 grams while for unmarried women this limit is 250 grams.
If you sell your gold within 3 years of purchasing it, the government will levy short-term capital gains tax on it. Apart from this, if you sell gold after 3 years, you will have to pay long-term capital gains tax.
Tax on digital gold: Compared to physical gold, digital gold can prove to be very beneficial in terms of returns. Based on their digital gold purchases, individuals only have to pay GST and other small fees when making the purchase. According to law, there is no upper limit for purchasing digital gold. You can spend up to Rs 2 lakh in a day on purchasing digital gold. Additionally, there is no short-term capital gains tax on digital gold held for less than 3 years. However, you will have to pay long-term capital gains tax at the rate of 20%.
Indian citizens are allowed to invest a maximum amount of 4 kg per year in gold investment schemes like Sovereign Gold Bond (SGB). Additionally, banks and other financial institutions will exclude holdings used as collateral from investment portfolios. The interest rate for SGB is 2.5% per annum, which is added to the taxable income of the buyer. But after eight years the Sovereign Gold Bond becomes tax free. You will not have to pay any GST on this.
If mutual funds and gold ETFs are held for more than 3 years, individuals will have to pay long-term capital gains tax on the fund when selling. Investing in gold can prove to be a wise decision, but it is important to know the right amount of this valuable metal to keep at home. This will help you in understanding your tax liability as well as protect you from any kind of legal action.
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