Tax Rule on Gold: There is no tax on gold or gold jewelery received by the bride during marriage. But, there are special rules for tax on gold or gold jewelery received on other occasions. There are also rules regarding how much gold a person can keep. It is very important for every person to know about these rules
There has been a tradition of giving gold jewelery as a gift at a wedding. Apart from the parents, other relatives gift gold jewelery to the bride. The question is, what are the tax rules on gold received as a gift? Generally, tax is levied on money or property received from someone. Taxpayers are required to show this as ‘Income from other sources’ in their Income Tax Return (ITR). But, the good thing is that there is no tax on gold received during marriage. Sujit Bangar, founder of TaxBuddy.com said that there is no tax on any gift received at a wedding. These gifts can be jewellery, anything, utensils, furniture etc. Under Section 56(2)(X) of the Income Tax Act, the stridhan received by the bride on the occasion of marriage does not come under the purview of tax.
What tax will be levied on gold received as gift?
Now the question is that if gold is given as a gift on occasions other than marriage or without it, will it be taxed? The answer is yes. But, gold received from some relatives has been kept out of the tax net. RSM India founder Suresh Surana said that if a woman receives gifts from her husband, brother, sister and her in-laws, then there will be no tax on it. If Income Tax officials ask a woman questions about her gold jewellery, she will have to tell about its source. For example, if he has received gold during the division of family property, he will have to show a copy of the will or deed of gift.
How much gold can a man or woman keep?
If you do not have any proof or cannot tell about its source, then the rules regarding the quantity of gold apply. A married woman is allowed to keep up to 500 grams of gold. An unmarried woman can keep up to 250 grams of gold with herself. A man can possess up to 100 grams of gold without any proof of the source.
What happens to the gold found in income tax raids?
If more than the limit mentioned above is found in an Income Tax raid and its source is not disclosed, it will be confiscated. If the taxpayer has not disclosed the legitimate source of the money used to buy gold, it will be taxed. Surana said that if during the raid the person reveals the source of the money used to buy the gold and the Income Tax officials are satisfied with it, then they can decide not to confiscate the gold.
What are the tax rules on gold found in raids?
Income tax officials also consider other factors while examining the evidence, statements etc. presented by the taxpayers. These include the social status, traditions etc. of the family. But if gold is confiscated and tax is imposed on it, the tax rate is very high. Surana said that 60 percent tax is imposed on the value of gold. Then 25 percent surcharge is imposed. 4 percent health and education cess is levied. After this, 10 percent penalty is imposed on the tax.
