Finance & Economics

How Much Gold Can a Person Own in India

Indians allegedly hold around 10% of the world’s physical gold supply. For a nation so keen on this precious metal, regulators have established certain limitations to the gold ownership. Here’s how much gold a person can own in India.

How Much Gold Can a Person Own in India

How Much Gold People In India Own

According to the World Gold Council, Indian citizens collectively own approximately 25,000 tonnes of gold. It is much more than the country’s official gold reserve – approximately 798 tonnes – or even gold reserves of the IMF – 2,814 metric tonnes.

People in India constantly buy gold whether for auspicious wedding presents or as an investment. The citizens of India always keep track of live gold rates to buy gold at its best price. The gold loan market in India is also flourishing, with a total of 2,950-3,350t being used as collateral.

Statistics say that about two thirds of the gold in India belongs to individuals living in rural areas. Despite the fintech advancements, most of these citizens have been historically unbanked for a long time. For them, gold is a clear winner among the savings methods. It is reliable, profitable and can be transferred within the family without additional taxes.

As almost every person in India owns some gold, the government has introduced certain limitations to the amount of gold one can legally own.

How Much Gold Can a Person in India Own

Don’t get it wrong. There are no strict limits as to how much gold a person can actually buy or possess. At the same time, owning an amount of gold over a certain threshold requires legal explanation of the source of one’s income. Simply put, gold is expensive and if you have a lot of it, you should be able to explain where you got the money for it to the tax service.

The rule by the Central Board of Direct Taxes (CBDT) sets the limits for holding unaccounted gold jewellery and ornaments as follows:

  • Married women: 500 grams of gold;
  • Single women: 250 grams of gold;
  • Men, disrespectful of their marital status: 100 grams of gold.

Those who possess more gold than the prescribed limit, should be able to prove their income documentally. Otherwise, the excess gold that is not declared in the wealth-tax return can be seized by authorities. You should mind that the CBDT circular allows not to seize only gold jewellery with unexplained sources. That doesn’t concern gold bars and coins. Those can be seized even if they weigh less than the abovementioned limits if not declared and properly justified.

Therefore, you should preserve your tax invoices when buying gold, be it bullion or jewellery. If you exchange gold jewellery, keep both a copy of invoice of the exchange and the invoice of the original purchase. If you receive gold as an inheritance, you should also be able to present supporting documents.

The difference between unaccounted gold norms for men and women in India is rooted in local traditions. As a rule, brides receive gold jewellery as a wedding gift from their family and friends. Besides, childbirth is another reason for women to get gold presents.

The traditions are traced back to old property and inheritance laws. Typically, sons received family property and daughters were left with gold as a wealth transfer means. Besides, gold gifts to Indian women symbolise prosperity for the new family and the sacredness of the marriage.

That is why CBDT allows some exceptions to the rule. In specific cases, with regard to the status of the family, and the customs and practices of the community to which the family belongs, the authorized officer may decide not to seize excess gold jewellery if they find a larger quantity justified in these specific circumstances.

Other Limitations to Gold Purchase in India

In a country full of gold, it was only a matter of time before the government introduced other forms of control over gold trade and ownership.

In 2002, the Prevention of Money Laundering Act (PMLA) tightened the rules for buying gold with cash. For jewellers, it meant they had to comply with KYC norms, ask their clients to verify their IDs with PAN or Aadhaar for cash transactions above the specified limit, and report large-value cash transactions.

Moreover, Section 269ST of the Income Tax Act explicitly prohibits spending more than Rs 2 lakh in cash in a single day. So, to make a larger transaction when buying gold, one needs to use a bank card or mobile wallet. The penalty for violating this law is equivalent to the amount of the cash transaction and falls on the receiver, so gold sellers won’t be willing to accept cash payments when gold price exceeds 2 lakh.

Even if you use electronic forms of payment for gold purchases worth over 2 lakh, you need to present your PAN or Aadhaar.


To sum up, there is no limit on how much gold can a person own in India, as long as you purchase it legally. If you’re unable to prove the source of income needed to buy the gold you own, gold can be seized in a raid. However, gold jewellery under certain limit (100-500g) will not be confiscated even if it’s unaccounted for. The same principle doesn’t work for gold bars and coins. If they’re undeclared and unjustified, the gold may be seized despite the amount you own.

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