Last date to file a belated or revised income tax return (ITR) for FY24-25 is 31 December 2025. While filing your revised ITR for AW 25-26, one needs to remain cautious while filing the details of one’s gold holdings. Amid soaring gold prices, one need not get confused that it’s the weight that matters, not the rate. So, skyrocketing gold prices don’t play a role, but rather the weight of your preserved gold. Apart from this, one can hold a certain amount of gold without explanation, and a significant portion of the gold can’t be seized, even during an income tax raid.
Income tax rules on your gold holding
According to the CBDT Instruction No. 1916, dated 11th May 1994, “In the case of a person not assessed to wealth tax, gold 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 need not be seized.”
It was also clarified that no seizure should be made by the Search Party of the Jewellery and Ornaments found during the course of search proceedings under section 132, where the same have been duly declared in the wealth tax returns filed by the taxpayer or where such ornaments are within the prescribed limits of 100 gm, 250 gm or 500 gm as stated in the said instruction.
On what form of gold is allowed under this CBDT instruction, Balwant Jain, a Mumbai-based tax and investment expert, said, “Only gold in the form of jewellery is covered under this rule. Gold coins, gold bars, and all forms of gold other than jewellery can be seized in the case of a non-satisfactory explanation by the gold holder,” adding, “The CBDT has directed that in the case of a person not assessed to wealth tax, gold 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, need not be seized.”
Why this income tax relaxation for gold holders?
Clarifying the reason behind this CBDT instruction, Pankaj Mathpal, MD & CEO, at Optima Money Managers, said, “We can take notice of the fact that at the time of wedding, the daughter/daughter-in-law receives gold ornaments, jewellery and other goods not only from parental side but from the in-laws side as well at the time of farewell or at the time when the daughter-in-law enters the house of her husband. We can also take notice of the fact that thereafter also, she continues to receive some small items by various other close friends and relatives of both the sides as well as on the auspicious occasion of birth of a child whether male or female and the CBDT, looking to such customs prevailing throughout India, in one way or the another, came out with this Circular. We accordingly are of the firm opinion that it should also mean that to the extent of the aforesaid jewellery, found in possession of the various persons, even the source cannot be questioned. It is certainly ‘Stridhan’ of the woman and normally no question, at least to the said extent, can be made.”
Pankaj Mathpal said that gold jewellery beyond the above-mentioned limit can be seized by the gold holder under Section 132 of the Income Tax Act, 1932. He stated that it’s CBDT Instruction No. 1916, dated 11-5-1994, which specifies the amount that can be seized during a raid and lays down limits on the amount of jewellery an individual can possess.
On how much gold an investor can hold in various forms, Pankaj Mathpal said, “The Finance Ministry has clarified on December 1, 2018, there is no limit on holding of gold jewellery or ornaments by anybody provided it is acquired from explained sources of income, including inheritance.”
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
