In Indian weddings, gifting gold is a common tradition. Whether it’s a chain, ring, or coins, relatives love to give gold to the bride and groom. But many people don’t know that these gold gifts may also invite a tax bill. If you recently received gold jewellery or coins during your wedding, you must understand what the tax law says about it. Under the Income Tax Act, certain gold gifts are taxable if their value exceeds a certain limit. Here’s what you need to know to stay on the safe side.
When Does Gold Gift Become Taxable?
If you receive any kind of gold — whether jewellery, coins, bullion, or even digital gold — worth more than Rs. 50,000, it is treated as “income from other sources” under Section 56(2)(x) of the Income Tax Act. You must then include it in your total income and pay tax on it according to your income slab.
But there are exceptions. Not all gold gifts are taxed. The law is clear about who can give you tax-free gold.
Who Can Gift Gold Without Tax?
Gold received from specific relatives is fully exempt from tax — no matter how much it is worth. These relatives include:
- Your spouse
- Your parents
- Your siblings (brother or sister)
- Your grandparents
- Your children
- Your grandchildren
- Your parents-in-law
- Any lineal ascendant or descendant
Also, gold received as a will or inheritance is tax-free. Even if the value is more than Rs. 50,000, you don’t have to worry in such cases.
So, if you received gold jewellery from your parents or grandparents during your wedding, it is not taxable. But if a distant cousin, friend, or colleague gave you a gold chain worth Rs. 70,000, then you must report it as income and pay tax.
What If You Sell the Gold Later?
The moment you sell gold, it becomes a capital asset, and the tax rules change. The tax you pay depends on how long you held the gold before selling it.
- If you sell gold within 3 years, it is treated as short-term capital gain (STCG). You pay tax as per your income tax slab.
- If you sell gold after 3 years, it is treated as long-term capital gain (LTCG). In that case, you pay 20% tax with indexation benefit, plus 4% cess.
So, if you sell the gold gifted to you within 3 years, your tax slab applies. If you hold it for more than 3 years, you save some tax due to indexation.
What About Digital Gold, ETFs and SGB?
India is slowly shifting from physical gold to digital and paper gold options. Let’s look at how taxes work for different gold formats:
Digital Gold:
- Sell before 3 years: STCG (as per your slab)
- Sell after 3 years: 20% LTCG + 4% cess
Gold ETFs and Gold Mutual Funds:
- Similar rules as digital gold. If held over 3 years, 20% LTCG with indexation applies.
Sovereign Gold Bonds (SGB):
- Held for full 8 years: No capital gains tax
- However, the 2.5% interest you earn annually is added to your income and taxed as per your slab
So, SGB is the most tax-friendly option if you can hold it till maturity.
Why You Should Keep Records
If you receive gold at a wedding or any other function, make sure to keep a record of who gave it and the approximate value. If you get a notice from the Income Tax Department later, these details will help you explain the source of income and avoid penalty.
Also, if you gift gold to someone, especially a non-relative, and the value crosses Rs. 50,000, it becomes taxable in the hands of the receiver. So, the one who gets the gift is responsible for paying tax if required.
Gold in Indian Culture vs. Gold in Tax Rules
In India, gold is more than a metal — it’s a tradition, a family pride, and a sign of prosperity. But legally, gold is also seen as an asset. Whether you buy it, sell it, or receive it as a gift, it attracts certain tax rules. Understanding these rules will help you avoid tax issues and plan better.
During wedding season or festivals like Diwali, people buy and gift gold freely. But not many know that the Income Tax Department is keeping an eye on large gifts. Be wise and keep your paperwork ready. If the gold gift is over Rs. 50,000 and not from a close relative, you must declare it in your ITR.
Disclaimer: The tax laws mentioned here are subject to change as per government updates. Always consult a certified tax expert or CA for personalised advice.
Source: TV9 Hindi, Income Tax Act
