Disclosing gold and jewellery in your Income Tax Return is an area of genuine confusion for many taxpayers. While holding gold is entirely legal in India, failing to disclose significant holdings in your ITR when required can create problems during income tax scrutiny. Here is a clear guide to what you need to disclose and how.
Who Needs to Disclose Gold in ITR?
Individuals filing ITR-2 or ITR-3 (which covers income from capital gains, business income, or foreign assets) are required to disclose assets including jewellery in the Schedule AL (Assets and Liabilities) section if their total income exceeds ₹50 lakhs in the assessment year. For taxpayers filing ITR-1 or ITR-4 with income below ₹50 lakhs, there is no mandatory Schedule AL, but capital gains from the sale of gold must still be reported regardless of income level.
What Value Should You Declare?
Jewellery should be declared at its cost of acquisition where known, or at a fair market value if the cost cannot be ascertained (for example, inherited jewellery). For Schedule AL purposes, the value declared is the balance-sheet value as of March 31 of the relevant financial year, not the current market value.
How to Handle Inherited Gold
Gold received through inheritance is not taxable in the hands of the recipient. When you eventually sell inherited gold, the original purchase cost and acquisition date of the original owner are used for capital gains calculation. Document the lineage of inherited gold (through a will, family settlement, or letter from a chartered accountant) to avoid complications in case of scrutiny.
Gifts of Gold
Gold received as a gift from a relative (as defined under the Income Tax Act — which includes spouse, siblings, parents, and in-laws) is not taxable regardless of value. Gold gifts from non-relatives are taxable if the aggregate value of gifts received during the year exceeds ₹50,000.