How much gold can be kept in home w/o tax issue

A lady in ITAT Mumbai successfully defended her possession of substantial gold, diamond and silver items in her home and bank lockers against tax authorities. The Income Tax Department seized her belongings during a search operation, alleging they were unexplained assets. However, she explained that the items accumulated over decades through marriage gifts, inheritance and family purchases.

The ITAT Mumbai ruled that while the CBDT Instruction No. 1916 provides indicative benchmarks for seizure of gold jewellery - 500 grams for married women, 250 grams for unmarried women and 100 grams for males - it does not create a statutory ceiling on jewellery holdings. The tribunal emphasized that the benchmarks serve as practical guidelines for assessing the legitimacy of family possessions, rather than fixed tax-free thresholds.

For pure gold, the court clarified that the instruction does not automatically deem all gold bullion as unexplained. A Chartered Accountant, Suresh Surana, clarified that there is no statutory limit on the amount of gold or silver a person may possess at home or in a bank locker, provided the acquisition is lawful and the source can be satisfactorily explained.

He also noted that the indicative benchmarks in CBDT Instruction No. 1916 should not be seen as absolute tax-free ownership thresholds, as they are mere guidelines that the tax authorities may consider in deciding whether an individual's explanation for their possession is reasonable or not.