How much gold and silver can you legally keep at home? Is there a legal limit? There is no legally prescribed upper limit on the quantity of gold or silver a person can hold at home or in a bank locker, says Chartered Accountant Suresh Surana. What matters is whether the assets were acquired lawfully and whether the owner can explain how they came into their possession.In a recent case before the ITAT Mumbai, the Income Tax Department carried out searches at a woman’s residence and bank lockers, and seized diamonds, gold and silver articles, along with jewellery, which it treated as unexplained assets.The seized items included gold jewellery of 427.71 grams, 258 grams of pure gold, diamond-studded jewellery containing 161.33 grams of gold, and articles made of a silver mixture weighing 11.200 kg, according to an ET report.Also Read | Gold at Rs 1.5 lakh per 10 grams is pushing middle-class Indian buyers to silver who are getting 650 grams of silver at the same price; some betting silver at Rs 2.3 lakh per kg may hit Rs 4 lakhWhen the tax authorities questioned her about how she had acquired these assets, the woman explained that her jewellery and gold holdings had built up over several decades.She attributed it to gifts that she received at the time of marriage, streedhan, inheritance, and also customary presents from family members and purchases. She had been married for more than 35 years.To support her explanation, she also submitted details showing that the family’s combined gross total income across the five assessment years under consideration was approximately Rs 4.55 crore.The Income Tax Assessing Officer (AO) accepted her explanation only in part. In doing so, the officer referred to CBDT Instruction No. 1916, which sets out indicative quantities of gold jewellery that may ordinarily be accepted during an income-tax search: 500 grams for a married woman, 250 grams for an unmarried woman and 100 grams for a male family member, for the purpose of seizure.The woman secured partial relief before the ITAT Mumbai, specifically on the issue concerning the jewellery and gold holdings.The tribunal observed that it was inconsistent to accept ordinary gold jewellery and diamond-studded gold jewellery as part of the family’s holdings while treating pure gold as unexplained merely because it was in a different physical form.It also held that the absence of old purchase bills, by itself, was not conclusive evidence against the woman, given her explanation that the assets had accumulated through marriage gifts, inheritance and several decades of ownership.The ITAT Mumbai further clarified that CBDT Instruction No. 1916 does not establish an absolute exemption from tax or prescribe a statutory upper limit on how much jewellery a person may own.Instead, the quantities mentioned in the instruction serve as practical benchmarks to help determine whether the jewellery held by a family can reasonably be regarded as explained.At the same time, the tribunal made it clear that its finding concerning pure gold was based on the specific facts of this case. The decision should not be interpreted as establishing a general rule that all gold bullion or pure gold automatically qualifies for the treatment provided under CBDT Instruction No. 1916.Also Read | She bought gold at a discount of Rs 5,000 per 10 grams, took no receipt: How Indians are turning to under-the-counter cash deals as gold prices soar, bagging discounts of up to 6%
How much gold and silver jewellery can you keep?
Chartered Accountant Suresh Surana told ET: “Any quantity may be possessed, provided its acquisition is lawful, and the person can satisfactorily explain its source.”In the case of gold jewellery, CBDT Instruction No. 1916 sets out indicative quantities that may be considered while deciding whether jewellery should be seized during an income-tax search. These are 500 grams for a married woman, 250 grams for an unmarried woman and 100 grams for a male family member.However, these quantities do not guarantee that gold within the specified limits will automatically be exempt from tax scrutiny. Surana says: “These limits should not be regarded as absolute tax-free ownership thresholds as the judicial authorities may still require explanations for their source.”The position is different for silver articles, as the instruction does not expressly specify any quantitative benchmark for them. In a case before the ITAT Mumbai, the tribunal accepted 11.2 kg of silver-mix articles after taking into account the woman’s long marriage, the customary accumulation of valuables, inheritance and the family’s financial position.The tribunal’s decision was based on the specific circumstances of that case. It should not be interpreted as establishing a general limit on the quantity of silver that individuals can keep.For those holding substantial amounts of gold, silver or bullion, Surana advises retaining whatever documents or other reasonable evidence are available to establish how the assets were acquired. Such evidence could support a claim that the holdings came from purchases, inheritance, gifts or long-standing ownership within the family.
