How Much Gold You Can Keep at Home Legally?

Indians are known for the habit of keeping gold at home as jewellery. Every household in India holds a moderate quantity of gold as ornaments. However, it is fascinating to know how much gold one can keep at home without tax implications. As the gold price is skyrocketing, many of them are apprehensive about whether owning large quantities of gold could invite trouble from tax authorities. But long-standing income tax rules make it clear that ownership of gold itself is not illegal and that traditional household jewellery is protected during income tax searches.

These safeguards are outlined in CBDT Instruction No. 1916, issued on May 11, 1994. The instruction does not place a ceiling on how much gold a person may own. Instead, it defines what quantity of jewellery tax officials are barred from seizing during raids, even if the individual cannot immediately show purchase bills.

Jewellery quantities protected from seizure

Under CBDT Instruction No. 1916, income tax officers conducting search proceedings under Section 132 of the Income Tax Act are directed not to seize gold jewellery and ornaments held within certain limits, provided the person is not assessed to wealth tax.

The instruction clearly states that up to 500 grams per married woman, 250 grams per unmarried woman, and 100 grams per male member of the family must not be seized. This protection applies even when the individual searched is unable to immediately explain the source of the jewellery during a raid.

The CBDT further clarified that no seizure should be made if the jewellery has already been disclosed in wealth tax returns or if the quantity falls within the prescribed limits mentioned in the instruction.

No legal ceiling if the source of gold is explained

Tax experts writing on specialist advisory platforms have repeatedly clarified that the CBDT instruction does not impose any overall limit on gold ownership. A legal analysis published on Tax Guru, a tax and compliance advisory website, explains that individuals are free to hold any quantity of gold jewellery, provided they can explain how it was acquired.

Gold purchased from disclosed income, inherited through family succession, or received as documented gifts is considered fully permissible, regardless of weight.

The analysis also highlights that authorised officers are given discretion under the instruction. Depending on the family's social background, customs or community traditions, officials may decide not to seize even larger quantities of jewellery if the holding appears reasonable and customary.

Jewellery is treated differently from coins and bars

While the CBDT instruction offers protection for gold jewellery and ornaments, other forms of gold are treated more strictly under income tax rules. Legal commentary published by Taxmann, a leading tax and legal research platform, explains that the safe limits under Instruction No. 1916 apply mainly to jewellery worn or stored as ornaments.

Gold coins, bars and bullion do not enjoy the same protection. If such items are found during a search and the owner cannot satisfactorily explain their source, tax officials are empowered to seize them regardless of quantity. This distinction is important for investors who hold gold in physical forms other than jewellery.

Why the CBDT issued this instruction

The CBDT issued the instructions considering the custom rooted in the Indian community, which provides immense value to the gold procession. According to the experts, the authority recognises that urging the families to keep detailed documentation for each ornament would be impractical and unfair.

By issuing Instruction No. 1916, the CBDT aimed to ensure that genuine household jewellery is not automatically treated as undisclosed income during search operations.

PAN requirement for high-value gold purchases

While possession of jewellery within the prescribed limits is protected, the families are required to keep proper documentation for new purchases. As of early 2026, quoting a Permanent Account Number remains mandatory for any gold purchase exceeding Rs. 200,000.

This demands high-value transactions being recorded within the formal financial system and linked to declared income, which could help authorities track large purchases without interfering in legitimate household holdings.

Additionally, while investors are allowed to invest in Sovereign Gold Bonds (SGBs) up to 4 kg per year, many institutional windows for these bonds have shifted as the government moves toward different borrowing strategies in 2025-2026.

Clear safeguards, but documentation remains key

Tax advisory platforms emphasise that CBDT Instruction No. 1916 is meant to prevent arbitrary seizures, not to legitimise unexplained wealth. Gold jewellery within the specified limits enjoys protection, and any quantity acquired from explained sources is lawful. However, maintaining records for major purchases remains crucial to avoid disputes during tax scrutiny.

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