There is no limit on the legitimate holding of gold and jewellery, including from inheritance, and there would be no seizure of bullion up to a certain limit even if that does not seem to match income, announced government.
As rumours of government crack down on gold holdings raged, the finance ministry and the Central Board of Direct Taxes (CBDT) came with clarifications.
In order to remove any doubt about the current position of Income Tax Law with respect to gold jewellery, the following points are categorically clarified:
1. There is no limit on holding of gold jewellery or ornaments by anybody provided it is acquired from explained sources of income including inheritance.
2. Jewellery and ornaments to the extend of 500 grams for married lady, 250 grams for an unmarried lady and 100 grams for the male member will not be seized, even if prima facie, it does not seem to be matching with the income record of the assessee.
3. Officer conducting search has discretion not to seize the even higher quantity of gold jewellery based on factors including family customs and traditions.
4. The jewellery/gold purchased out of disclosed income or out of exempted income like agricultural income or out of reasonable household savings or legally inherited which has been acquired out of explained sources is neither chargeable to tax under the existing provisions nor under the proposed amended provisions," the CBDT said.