Do you know that there is a limit to the quantity of gold one can have without an invoice? Let us take a look at the income tax rules in these regards.
Gold has been the most auspicious and proud possession amongst the ladies in India. Along with gold being the most important asset in wealth building, it is linked to many Indian traditions and culture.
However, most of us are not aware that one can have physical gold without an invoice only up to a certain quantity. Holding physical gold beyond a specific limit without an invoice can be problematic.
CBDT issued a press release in Dec 2016, wherein it declared that one could hold gold jewellery without any limit provided that the source of investment or inheritance can be proved. Also, the income of the assessee should be in line with the quantity of the gold held.
Further, the press release states the maximum quantity of the gold one can hold without invoice and shall not be seized by the income tax authorities at the time of search in premises.
According to these rules, a married woman can possess 500 grams of gold individually without having proof of the source/invoice; an unmarried woman can hold up to 250 grams of gold, whereas a male member of the family can hold 100 grams of gold without any invoice/proof of source. For income tax purposes, gold includes all forms like gold coins, bars, jewellery etc.
If the assessee is searched by the income tax authorities and possesses physical gold without invoice or fails to explain/prove the source of such gold. In such situations, the income tax authorities have the powers to seize such undisclosed gold under section 132 of the Income Tax Act.
Before the press release, there was a myth amongst the Indians that they can hold gold without any limit of quantity. Hence, it is essential for Indian households to be aware of the quantity of gold one can hold without an invoice as large quantities of gold is received by way of inheritance. Hence, the assessee should have proof of evidence that such gold is received through inheritance or gifts. A family settlement deed or gift deed can also be provided as proof of the inheritance. In some cases, the income tax officer might not seize such a higher quantity of gold based on the family’s income, social status, customs and traditions.
An individual receiving gold more than the maximum limit specified through inheritance or other modes should declare the same in the income tax return in the asset column after getting its accurate valuation. This can also avoid unnecessary litigation.
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