Dhanteras 2025: Got Gold As A Dhanteras Gift? Before You Accept That, Read This Tax Rule

Gold is a popular and auspicious gift in India, especially during festivals and special occasions. However, both the giver and receiver should be aware of the tax implications involved.

Receiving Gold Gifts

Gold received as a gift is taxable under the head 'Income from Other Sources' as it is classified as 'gifts received in kind'. All gifts are taxable if the total value of gifts received in a financial year exceeds Rs 50,000. For instance, if you received a gift worth Rs 30,000 earlier in the year and now receive another worth Rs 40,000, the taxable amount would be Rs 70,000.

However, gifts from the following relatives are exempt from tax, regardless of value as per CA Chandni Anandan, Tax Expert at ClearTax:

• Spouse
• Parents and parents-in-law
• Sons and daughters
• Grandparents or grandchildren
• Siblings of self and spouse
• Siblings of parents or parents-in-law
• Spouse of any of the above

This means that gifts from friends or distant relatives become taxable once they cross the Rs 50,000 threshold and are taxed according to the applicable income tax slab rates.

Selling Gold Gifts

Gold is classified as a capital asset under the Income Tax Act. When you sell gold gifts, you are liable for capital gains tax.

Cost of acquisition: You can treat the amount spent by the person who gifted you the gold as your acquisition cost. Deducting this from the sale price will help determine the capital gains.

Period of holding: The holding period includes the time the gold was held by the person who gifted it to you.

Short-term capital gains (STCG): If the gold is held for up to 2 years, gains are taxed according to applicable slab rates.

Long-term capital gains (LTCG): If held for more than 2 years, gains are taxed at a flat rate of 12.5% (without indexation).

Gifting Gold

Giving gold as a gift does not attract any tax for the giver. The transfer of gold as a gift is not treated as a taxable capital asset transaction under Section 47 of the Income Tax Act.

"These tax rules apply year-round, and there is no special tax exemption for gold received during festivals like Dhanteras," said CA Chandni Anandan, Tax Expert at ClearTax.

Rs 50,000 Rule: How Your Dhanteras Gold Gift Could Turn Into a Tax Trap

In accordance with Section 56(2)(x) of the Income-tax Act, 1961 (hereinafter referred to as 'the IT Act'), any sum of money or property (including gold, jewellery, or bullion) received by an individual without consideration is treated as a gift and may be subject to tax under the head "Income from Other Sources."

On the occasion of Dhanteras, if an individual receives gold or jewellery as a gift from a non-relative, such receipt will be taxable if the aggregate fair market value of all gifts from non-relatives exceeds Rs. 50,000 in a financial year. Once this threshold is breached, the entire value of the gifts becomes taxable.

"On the other hand, gold gifts received from relatives, as defined under the Act, are fully exempt from tax, regardless of the amount or value. The term "relative" includes the individual's spouse, siblings, siblings of the spouse, siblings of either parent, lineal ascendants or descendants (such as parents, children, grandparents, and grandchildren), and the spouses of such relatives. Accordingly, gold received from such specified relatives on Dhanteras would not attract any tax liability. It is, however, important to note that the exemption available for gifts received on the occasion of marriage does not extend to other festivals such as Dhanteras," said CA (Dr.) Suresh Surana.

"Where a gold gift received from a non-relative is taxable, the recipient must report the value of the gold under the head "Income from Other Sources" in their Income Tax Return (ITR) for the relevant financial year. Proper documentation should be maintained, including a gift deed or declaration, proof of the donor's identity and relationship, and, where applicable, a valuation certificate supporting the fair market value of the gold. This ensures transparency and supports the taxpayer's position in case of any enquiry or scrutiny by the Income-tax Department," CA (Dr.) Suresh Surana further added.

While receiving gold gifts on auspicious occasions like Dhanteras is a common cultural practice, individuals should remain mindful of the tax implications and the importance of maintaining clear records. Gifts from relatives are entirely exempt, but those from non-relatives must be evaluated against the statutory threshold to determine taxability.

Determining The Cost of Acquisition for Inherited Gold


To calculate capital gains or losses on gold, it's crucial to establish the cost of acquisition. If you possess receipts, the cost indicated there is used.

"However, if you've inherited gold, the cost equals what the original owner paid, or you can choose the fair market value on April 1, 2001, if it was purchased before then. In the absence of receipts, a valuation from an income tax-registered valuer is required as of either the transfer date or April 1, 2001, whichever is later," as per Mr Sujit Bangar, Founder Taxbuddy.com.

Reporting and Compliance

Proper documentation/receipts and compliance with tax regulations are crucial for gold investors. Capital gains from gold investments must be accurately reported in the income tax return under the "Capital Gains" - LTCG/STCG Capital Assets section. Maintaining records of gold purchases and sales is essential for tax assessment and audit purposes.

Conclusion

It is important to keep in mind that gold gifts are taxable except in some cases where they are exempt and accordingly, the disclosure in the return needs to be made.

"Gifts received from relatives are exempt. Relatives would include parents, siblings, spouse, children, and grandchildren, and these are fully exempt from tax, regardless of their value," said Anita Basrur, Partner, Sudit K. Parekh & Co. LLP.

While gifts received from non-relatives are taxable if the total value exceeds Rs 50,000 in a financial year.

"The fair market value in such cases must be declared in the Income Tax Return (ITR) based on a valuation report obtained in accordance with Rule 11UA of the Income-Tax Rules. It is advisable for taxpayers to maintain proper documentation, including details of the person from whom the gift was received and the valuation report, to substantiate the nature and source of such gifts in case of scrutiny," said Manas Gond- CEO and Co- founder Prosperr.io.

This ensures transparency and compliance with the provisions of the Income-Tax Act.

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