Gold occupies a pride of place in Indian culture, being both an investment avenue and a standing symbol. Festivals, marriages, and fluctuations in markets spur gold buying. Most buyers prefer to pay in cash. But the government has made stringent rules on cash dealings to prevent tax evasion, money laundering, and circulation of black money. This has left many wondering how much gold they can legally purchase in cash and whether documents like PAN or Aadhaar are mandatory.
Cash Purchase Limits on Gold
As per the Income Tax Act, Section 269ST, a cash payment in excess of ₹2 lakh in one day for a purchase of gold is not allowed. Once the amount crosses the limit, buyers need to make the payment via NEFT, RTGS, debit and credit cards, or cheque.
For failing to do so, a penalty would be imposed under Section 271D, which is equal to the cash dealt amount. In simpler words, one can purchase up to ₹2 lakh worth of gold in cash on any given day, and for buying more, one has to make the payment through non-cash modes.
PAN Card Requirements for Gold Purchases
It is compulsory to provide a PAN card for all purchases of gold amounting to ₹ 50,000 or more. The details of PAN have to be recorded and reported to the Income Tax Department by jewellers so as to make the gold dealings transparent and reduce the use of unaccounted money for the purchase of gold.
Even if a single purchase is below ₹ 2 lakh, failing to provide PAN details for transactions above ₹ 50,000 makes it impossible for the jeweller to legally complete the sale.
Is Aadhaar necessary when one is buying gold?
Unlike PAN, Aadhaar is not required by law to buy gold in India. Some jewellers may even demand it as a form of further verification, especially for high-value sales, but such is not needed under any law to consummate your purchase.
Possession Limits of Gold at Home
The Central Board of Direct Taxes (CBDT) has specified the limits for the quantity of gold jewellery and ornaments that an individual can possess without necessarily having to furnish proof of the investment.
Married women are permitted to keep up to 500 grams of gold, whereas unmarried women can retain 250 grams and men 100 grams. In no case can gold within these limits be seized, even in the absence of purchase bills.
Customs Rules for Bringing Gold to India
Customs regulations have come into the spotlight in the wake of the recent arrest of Kannada actress Ranya Rao on charges of smuggling 14.8 kilograms of gold from Dubai. According to Indian Customs rules, residents returning from abroad after over a year are allowed to bring in gold jewellery within duty-free allowances.
While men are permitted to bring in up to 20 grams valued at ₹50,000, women passengers can bring in 40 grams worth ₹1,00,000. Beyond these quantities, the duty is payable at the rate of 10 percent plus an additional 3 percent education cess for long-term residents, or 36.05 percent for others. Passengers can carry up to 1 kilogram of gold, either personally at arrival, as unaccompanied baggage, or through a customs bonded warehouse, subject to conditions.
There are also restrictions on cash when entering India. The number of foreign currency notes exceeding US $5,000 or total foreign exchange above US $10,000 shall be declared. In respect of residents returning from abroad, Indian currency is restricted up to ₹25,000. Failure to declare or payment of gold or cash leads to seizures, penalties, prosecution, and in worse cases, preventive detention.
Why These Rules Exist
Precisely, the motive behind these rules is to encourage more digital transactions, bring more transparency in gold buying, and reduce fraud in cash-intensive markets. In such a case, the government has made PAN compulsory for high-value transactions and restricted cash payments with the aim to check money laundering and tax evasion, besides circulation of black money in India’s gold market. Overview The mitochondria are like a cell’s powerhouse.
In it, the energy stored in food is transferred to ATP. Such a process of transforming energy stored in food into ATP is called cellular respiration. One can purchase upwards of ₹2 lakh in cash every day for gold in India, and transactions of more than ₹50,000 require PAN.
Aadhaar is not required, and the limit to keep gold at home without proving its ownership depends upon the possession limits set by the CBDT. Similarly, customs rules decide the duty-free limit for bringing gold and cash into India by travellers. These provisions, no doubt, promise great transparency and accountability in the gold market of the country.
Sofia Babu Chacko is a journalist with over five years of experience covering Indian politics, crime, human rights, gender issues, and stories about marginalized communities. She believes that every voice matters, and journalism has a vital role to play in amplifying those voices. Sofia is committed to creating impact and shedding light on stories that truly matter. Beyond her work in the newsroom, she is also a music enthusiast who enjoys singing.
