Dhanteras falls on Friday, 6 November 2026, and gold is at record levels: 24-carat gold was about ₹1,47,800 per 10 grams in Delhi on 20 October 2026. At these prices, a modest set of jewellery or a few coins can cross the limits that the tax law watches. Here is what to know before you buy, and what happens when you sell.
Before you buy: three limits that matter
| Rule | What it means |
|---|---|
| PAN above ₹2 lakh | For a purchase above ₹2 lakh, by any mode of payment, you must give your PAN. Without a PAN, you sign a declaration form instead. |
| Cash below ₹2 lakh | A jeweller cannot accept ₹2 lakh or more in cash from you for one bill, one day, or one occasion. The penalty, equal to the cash received, falls on the jeweller, so most jewellers will refuse. |
| GST | 3% GST on the value of gold, and 5% GST on making charges, on top of the rate. |
At ₹1.48 lakh per 10 grams, just 14 grams of 24-carat gold with GST and making charges crosses ₹2 lakh. Splitting one purchase into several bills on the same day or for the same occasion doesn't avoid either limit. Pay by UPI, card or bank transfer, and keep the bill.
Every gold purchase is visible to the tax department
Purchases on your PAN, card and UPI payments, and large cash deposits all feed the department's data on you. If a large purchase doesn't fit your declared income, expect a question. Paying from funds already in your bank account, out of income you have reported, is the simplest protection.
How much gold can you keep at home?
There is no legal limit on how much gold you can own, as long as you can explain where it came from: income, inheritance, gifts or savings. During a search, however, officers will not seize jewellery up to 500 grams for a married woman, 250 grams for an unmarried woman and 100 grams for a man in the family, even without documents. Anything beyond that needs proof: purchase bills, a will, a gift deed, or an earlier tax return or wealth record that shows it.
Keep bills and family records in one place. For inherited jewellery, a short note of who owned it and when it came to you helps a lot.
Physical gold, ETF, gold fund or SGB: how each is taxed when you sell
| Form of gold | Long-term after | Long-term tax | Short-term tax |
|---|---|---|---|
| Jewellery, coins, bars, digital gold | 24 months | 12.5%, no indexation | Slab rate |
| Gold ETF (listed) | 12 months | 12.5% | Slab rate |
| Gold mutual fund / fund of funds | 24 months | 12.5% | Slab rate |
| Sovereign Gold Bond, sold on exchange | 12 months | 12.5% | Slab rate |
| SGB held to maturity | Tax-free only if you bought it in the original RBI issue and held it till maturity (see below) | ||
Surcharge and 4% cess apply on top. Gains on gold jewellery can also be saved by investing in a residential house, subject to conditions.
The SGB change from 1 April 2026
Many people bought Sovereign Gold Bonds on the stock exchange, expecting the gain at maturity to be tax-free. The Finance Act, 2026 narrowed that. From 1 April 2026, the maturity gain is exempt only for an individual who subscribed in the original issue and held the bond until maturity. Bonds bought on the exchange, or redeemed early, are taxed as capital gains. The 2.5% yearly interest has always been taxable.
Exchanging old jewellery for new
Trading in old jewellery at Dhanteras is common. For tax, the exchange is a sale of the old jewellery. If you have held it more than 24 months, the gain is long-term and taxed at 12.5%. For inherited or gifted jewellery, your cost and holding period are those of the person you got it from, which usually makes it long-term. Keep the jeweller's exchange bill showing the weight and value given.
Gold as a gift
Gold received from a relative is tax-free. Gold from friends or others counts towards the ₹50,000 gift limit for the year at its market value. Above that, the full value is taxed. Our note on Diwali gifts and tax explains who counts as a relative.
A Dhanteras checklist
- Pay by UPI, card or bank transfer. Never pay ₹2 lakh or more in cash.
- Give your PAN for any bill above ₹2 lakh.
- Check the BIS hallmark and the HUID on the bill.
- Keep the bill: it is your cost when you sell, and your proof if questioned.
- For investment, compare a gold ETF (long-term after 12 months, no making charges or storage risk) with physical gold.
- Holding SGBs bought on the exchange? Plan for tax at maturity.
How Vitt-Marg helps
We are in Sector 63, Noida. We compute the tax when you sell or exchange gold, report it correctly in your return, and help families organise records for inherited jewellery. See our income tax consultant services in Noida.
General information, current as of October 2026, not advice for a specific case. GST and income-tax rules change often — check with us before acting on it.