What is the capital gains tax on gold in India in 2026?

Post-July 2024 budget: Long-term capital gains (LTCG) on physical gold held for more than 24 months (2 years) is taxed at 12.5% without indexation benefit. Before the 2024 budget, the rate was 20% with indexation after 36 months (3 years). Short-term capital gains (STCG) on gold held for 24 months or less are added to your total income and taxed at your applicable income tax slab rate (5%, 20% or 30%). Sovereign Gold Bonds held to 8-year maturity are exempt from capital gains tax entirely.

Is inherited gold taxable in India?

Inheriting gold is not a taxable event in India — there is no inheritance tax or estate duty currently. When you inherit gold, you take on the original owner's cost basis. When you eventually sell the inherited gold, capital gains are computed from the original purchase date and cost (or, for gold acquired before April 1, 2001, you may use the fair market value as on April 1, 2001 as the cost basis). The long-term holding period of 24 months includes the deceased's holding period — so gold inherited from a parent who held it for 10 years is immediately eligible for LTCG treatment when you sell it.

Do I need to show proof when selling old gold jewellery?

For cash purchases above ₹2 lakh by the jeweller, your PAN card is required under PMLA. When you sell jewellery and want to claim capital gains tax on your ITR, you need to establish the cost and date of acquisition. For old inherited or gift pieces where no receipt exists, you can use a sworn affidavit describing the acquisition, supported by valuation from a registered valuer. The burden of proof for cost basis rests with the taxpayer.

Is there any limit on how much gold I can legally hold in India?

India does not have a gold possession limit for declared, legally acquired gold. However, the Income Tax Department has issued guidelines on what levels of gold a household may hold without being questioned during search operations: a married woman may hold up to 500 grams; an unmarried woman up to 250 grams; a male household member up to 100 grams. These are not legal ceilings — you can hold more if you can explain the source. Inherited gold, documented purchases, and gifts from relatives with documentation are all legitimate explanations. The risk of unexplained, undocumented large gold holdings is that the IT department may treat it as unexplained income under Section 69A.

What is the tax treatment of digital gold — Gold ETF and Sovereign Gold Bond?

Gold ETF: LTCG at 12.5% after holding 24 months (same as physical gold post-2024 budget). STCG at slab rate if sold within 24 months. Sovereign Gold Bond (SGB): Interest at 2.5% per annum is taxable as income at your slab rate. Capital gains on redemption at 8-year maturity are completely exempt from tax. If sold on the secondary market before maturity, LTCG (after 12 months) at 12.5% or STCG at slab rate applies.

Gold Tax in India 2026: LTCG, GST, Inheritance and Wealth Rules Explained

Gold is India's most widely held asset outside of land — and one of the least understood from a tax perspective. Every time you buy gold jewellery you pay GST. Every time you sell gold you may owe capital gains tax. Gifting gold to relatives or receiving it as inheritance has its own tax logic. And the 2024 Union Budget made significant changes to gold's capital gains treatment that every Indian investor should understand. This guide gives you the complete 2026 picture.

Tax when BUYING gold jewellery

GST: 3% on total invoice value (gold value + making charges). This is paid at purchase and is non-refundable. GST applies to all buyers — residents, NRIs, tourists — at the point of sale in India.

GST on gold components breaks down as: 3% on gold value, 3% on making charges (from October 2019 all making charges attract 3% GST separately), and 3% on hallmarking charges if levied separately (most jewellers absorb this). Stone settings on studded jewellery attract 3% GST on the total piece value including the stones.

There is no GST exemption for any category of buyer or any religious/traditional jewellery. 3% is the uniform rate.

Tax when SELLING gold (capital gains)

The 2024 Union Budget (effective July 23, 2024) changed gold capital gains treatment significantly:

Scenario	Tax Rate (2026)	Notes
Sell gold held ≤ 24 months	STCG at slab rate (5/20/30%)	Added to total income
Sell gold held > 24 months	LTCG at 12.5% (no indexation)	No inflation adjustment from 2024 budget
SGB at 8-year maturity	Zero capital gains tax	Best tax treatment of any gold form
SGB sold on secondary market (>12M)	LTCG at 12.5%	Same as physical gold
Gold ETF (>24M)	LTCG at 12.5%	Same as physical gold post-2024

Before the 2024 budget: LTCG on gold was 20% with indexation benefit after 36 months. The 2024 changes reduced the rate (12.5%) and the holding period (24 months) but removed indexation. For gold held long-term (10+ years), the removal of indexation makes the effective tax burden higher than before. For shorter holds (3–5 years), the lower rate and shorter qualifying period is beneficial.

How to calculate capital gains on gold

Capital gain = Sale price − Cost of acquisition (no indexation from 2024 budget).

For gold purchased before April 1, 2001: you may use the fair market value as on April 1, 2001 as your cost of acquisition. A registered valuer's certificate establishes this value.

For gold inherited or received as a gift: you take on the original owner's cost of acquisition and their purchase date. A gift from a relative (as defined under Section 56(2)) is not taxable at the time of receipt — only when you sell.

Tax when GIFTING gold

Under Section 56(2) of the Income Tax Act:

Gift from a specified relative (parent, sibling, spouse, spouse's sibling, lineal ascendants/descendants and their spouses): completely exempt from tax regardless of value. This covers most Indian family gold transfers — mother to daughter at wedding, father to son, grandparent to grandchild.
Gift from a non-relative: If total gifts received from non-relatives in a financial year exceed ₹50,000, the entire amount is taxable as "income from other sources" at your slab rate. Below ₹50,000 from non-relatives — exempt.
Gift received at wedding: Gifts received at the time of marriage — from anyone — are exempt from income tax, regardless of value. This is a specific statutory exemption.

Practical implication: the gold jewellery a bride receives at her wedding — from parents, in-laws, relatives and guests — is entirely tax-exempt regardless of quantity or value, provided it is received at the time of the marriage event.

Tax on INHERITED gold

India does not have an inheritance tax (it was abolished in 1985). Receiving gold as inheritance is not a taxable event. However, when you sell inherited gold, you compute capital gains using the original owner's cost and date of purchase. The holding period for LTCG eligibility includes the deceased's holding period — so inherited gold that was bought 20 years ago is eligible for LTCG treatment immediately at sale.

For old inherited pieces where no purchase receipt exists, a registered valuer's certificate or a sworn affidavit establishing the acquisition details is used. For gold acquired before April 1, 2001 (by the original owner), fair market value as of April 1, 2001 is the cost basis.

The PAN card rule and cash transaction limits

Under PMLA and income tax regulations:

Cash purchases of gold above ₹2 lakh in a single transaction require PAN card from the buyer.
Cash purchases above ₹10 lakh in a financial year from a single jeweller require Form 60 or PAN and are reportable by the jeweller to the income tax department.
Digital payments (UPI, NEFT, card) do not have the same ₹2 lakh threshold for PAN, but jewellers will ask for KYC above ₹2 lakh as best practice.

The jeweller is required to report high-value transactions (above ₹10 lakh) to the Financial Intelligence Unit. Your gold purchase above this threshold will appear in your Annual Information Statement (AIS) on the income tax portal — ensure your ITR income is consistent with these purchases to avoid scrutiny.

Safe holding limits: what the IT department accepts

India has no legal ceiling on gold holdings — but the income tax department has issued administrative guidelines on what levels raise questions during search and seizure operations:

Married woman: up to 500 grams — not questioned (roughly ₹46 lakh at ₹9,200/gram current rate)
Unmarried woman: up to 250 grams
Male household member: up to 100 grams

These are not legal limits — they are guidelines for search officers. Any amount above these thresholds that you can explain through purchase receipts, inheritance documentation, or gift records is fully protected. Only undocumented, unexplained gold is at risk under Section 69A (unexplained investment). Maintaining your jewellery inventory with invoices and acquisition records is the practical solution.

Tax planning strategies for gold holders

Sovereign Gold Bonds for new investment: The complete LTCG exemption at 8-year maturity is unique among all gold instruments. For long-term gold allocation (money you won't need for 8 years), SGB offers the best after-tax return — gold appreciation + 2.5% annual interest + zero capital gains tax at maturity.
Spread large sales across financial years: If you are selling significant amounts of gold (above ₹50 lakh), spreading sales across two financial years keeps annual capital gains in a lower bracket.
Document everything: Maintain a digital inventory of all jewellery with purchase invoices, weight, HUID, and photos. This documentation protects against unexplained investment queries and simplifies estate planning.

This guide is for general information only. Tax treatment depends on individual circumstances. Consult a qualified chartered accountant for advice specific to your situation.

For understanding what gold is worth before you sell (to compute capital gains), see our sell old gold guide. For the gold price formula used by jewellers, see our gold price calculation guide. For the comparison between Sovereign Gold Bonds and physical gold, see our SGB vs physical gold guide.

Tax rules referenced in this article are based on the Finance Act 2024 and Income Tax Act as amended. For current official rules, refer to incometaxindia.gov.in. For GST rates on jewellery, see gst.gov.in.