With Dhanteras and Diwali around the corner — traditionally considered auspicious periods for buying gold — many households must be evaluating how much gold they can legally own and what the tax implications are.

No legal limit on gold ownership — if source is justified

India once had strict restrictions under the Gold Control Act of 1968, which prohibited citizens from holding gold beyond a certain quantity. The law was scrapped in 1990, and there is currently no legal cap on how much gold an individual can possess, provided the holder can prove a legitimate source of purchase through invoices, inheritance records or wealth disclosures.

However, income tax authorities follow separate guidelines during raids.

As per a Central Board of Direct Taxes (CBDT) circular dated May 11, 1994, of

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