How much gold can you legally keep at home?

Gold may be considered a safe-haven asset, but India’s growing appetite for the yellow metal is currently putting additional pressure on the country’s foreign exchange reserves.

In a speech delivered in Hyderabad’s Secunderabad, PM Modi urged Indians to avoid buying gold for the next one year. “If we make a few small changes for a year, we can save substantial foreign exchange,” PM Modi has said. Against this backdrop, questions are once again being raised about how much gold individuals can legally hold.

How much gold can a person hold?

There is no specific statutory limit under the Income-tax Act, 2025, on the quantity of gold that an individual can hold at home. However, the Income-tax framework becomes relevant from a disclosure and source-explanation perspective, particularly during search and seizure proceedings.

In this regard, the Central Board of Direct Taxes (CBDT), vide Instruction No. 1916 dated May 11, 1994, has laid down guidelines for seizure of jewellery during search operations under Section 132 of the IT Act, 1961 (now replaced by Section 247 of the IT Act, 2025). As per this instruction, gold jewellery and ornaments to the extent of:

• 500 grams per married woman,

• 250 grams per unmarried woman, and

• 100 grams per male member

shall not be seized, even if prima facie unexplained. It is important to note that this is not a limit on ownership, but merely a threshold for non-seizure during search proceedings. The Ministry of Finance, in its press release dated December 1, 2016, has also clarified that there is no restriction on holding gold if the source of acquisition can be substantiated.

Further, where gold is held in excess of the above limits, it may still be retained by the taxpayer, provided the individual is able to satisfactorily explain the source of acquisition, such as inheritance or gifts (including those received on marriage). “In the absence of a satisfactory explanation, the value of such gold may be treated as unexplained investment under Section 69A of the IT Act, 1961 (now replaced by Section 104 of the IT Act, 2025) and taxed accordingly,” said Suresh Surana, a Mumbai-based chartered accountant.

Accordingly, while there is no prescribed ceiling on holding gold at home, taxpayers should ensure that adequate documentation or a reasonable explanation is available to substantiate the source of such holdings, especially in the context of search or scrutiny proceedings under the Income-tax law. In cases where an individual’s total income exceeds Rs 1 crore during FY 2025–26, details of such holdings are also required to be disclosed under Schedule AL (Assets and Liabilities) in the Income Tax Return.

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