Buying Gold? Know Latest Gold Prices, Tax On Gold Purchase, And How Much Quantity Of Gold You Can Buy

Gold prices in India moved higher on Friday. If you are planning to buy gold or gold jewelry this festive season, you must know that you need to pay tax on gold purchase. Besides, there is a prescribed limit for the quantity of gold which you can keep at home. This article will tell you about the Goods and Service Tax (GST) levied on the purchase of gold and the permissible limits for holding gold jewelry and ornaments. Before we dwell deep into this, let us first have a look at the latest gold prices in India.

Gold Rates In India on November 3:

In India, the price of 10 grams of 24-carat gold costs Rs 61,750, while the price of the same quantity of 22-carat gold in the country is Rs 56,600. Though the price of the precious metal is slightly higher compared to yesterday's price, the gold rates have considerably declined compared to last week when the price of yellow metal saw a rally and traded above the Rs 62,000 mark amidst the Israel-Hamas conflict over concerns that the tension could spread to other regions as well.

Globally, Gold struggled for momentum on Friday as investors refrained from placing large bets ahead of the key non-farm payrolls report. Spot gold was unchanged at $1,986.24 an ounce as of 0759 GMT, while US gold futures were slightly changed at $1,994.00.

Tax on Gold purchase

On the purchase of gold, 3% GST is levied, while 5% GST is levied on making charges.

In case you exchange gold (say bars or coins etc.) for new jewelry, then zero GST. However, GST is charged only on the value of the excess weight, according to the tax2win website. Besides, there shall be no levy of GST on the sale of gold.

Income Tax levied on gold jewelry/Gold ETFs/ Gold MFs received as a gift

In case you have received gold jewelry/bullion/Gold ETFs/ Gold MFs as a gift, it will be taxable for you if the total market value of gold received is more than Rs 50,000. Depending on your income bracket, it is taxed under the head 'Income from other sources' at slab rates.

However, according to the tax2win website, tax exemptions have been provided in some instances, these include:

• If the total or overall value of gifts you received is up to INR 50,000 a year
• If you receive the gifts from relatives mentioned below:
• Spouse
• Your/your spouse's Brother or sister
• Your/ spouse's lineal ascendant or descendant (e.g., Children, parents, grandparents, etc.)
• Gifts received on the occasion of your marriage from friends or relatives
• Any asset received as inheritance under a will or any law of succession applicable to you

Furthermore, the Sale of gold jewelry/bullion/Gold ETFs/ Gold MFs is taxable under the head 'Capital gains' - short-term capital gain (STCG), and long-term capital gain (LTCG).

How much gold you can keep at home?

In India, there is no specified limit on how much quantity of gold jewelry you can keep at your home as long as you can explain the source of income that helped you to buy or invest the yellow metal. However, limitations have been prescribed on the amount of unaccounted gold jewelry that can be kept at home sans any tax troubles.

According to the Central Board of Direct Taxes (CBDT), the limits for holding gold jewelry and ornaments without showing any proof are as under:

• Married woman: Up to 500 grams of gold
• Unmarried woman: 250 grams of gold
• Men: Only 100 grams of gold

It is always recommended to purchase gold under valid tax invoices and retain those invoices for future reference. In case of gift or inheritance, documents like a gift deed or will, or other documents must be obtained and retained as proof of such investment.