It is common for most families in India to have gold jewelery that is 30-40 years old. These ornaments are often passed on from mother to daughter, grandmother to granddaughter or mother-in-law to daughter-in-law as inheritance or memento. Since these are several decades old, no one has the bill for their purchase. The absence of a bill does not mean that the gold kept in the house is illegal, but if questions ever arise in any legal or income tax investigation, the family may have to explain where the jewelery came from and who has the right to it.
Recently on 2 November 2026, the Supreme Court (SC) has given an order in the State of Bihar vs Phulpari Kumari case. In this case, the Patna High Court had canceled the action against a woman accused of having disproportionate assets, citing the instructions of the Income Tax Department related to gold. Overturning the High Court order, the SC made it clear that just because a woman has 500 grams of gold, it does not mean that the source of that gold is automatically proved. However, this order is related to a criminal case. This does not apply to every common family, but from this it is necessary to understand that along with having gold in the house, it is also important to keep an account of it.
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What is the real rule of 500, 250 and 100 grams of gold?
There is often confusion among people regarding the limit of gold. The Income Tax Department (CBDT) issued Instruction No. 1916 on 11 May 1994. It is just about not seizing gold during raids. Under this, if a married woman has gold up to 500 grams, an unmarried woman has 250 grams and a man has up to 100 grams of gold, the authorities do not confiscate it.
Considering the tradition and social status of the family, the officials can also give up more gold than this. But three things should always be remembered. First, there is no maximum legal limit for keeping gold at home. Secondly, there is no tax exemption on gold and thirdly, having gold within the prescribed limit does not mean that its source can never be questioned.
What does the Income Tax Act say?
Under section 11(2)(m) and sub-section (3)(c) of the new Income-tax Act, 2025, effective from April 1, 2026, there is no gift tax on gold received by will or inheritance. That means jewelery inherited from father to daughter or mother to son is tax-free. However, according to Section 524 of this new law, if gold is found in someone's possession or in a bank locker during the search by the IT department, then initially it can be assumed that the gold belongs to that person. Therefore, if jewelery belonging to different family members is kept in the same bank locker, it is wise to keep a record of the real owner of each jewellery.
If there is no bill, what evidence will be useful?
There is no single document prescribed in the law which can prove to be ancestral gold as soon as it is shown. In such a situation, the family should keep the papers safely according to different circumstances. First, papers of inherited gold, any record of family settlement, old locker or insurance documents should be present. Second, the old list of gifts received at the wedding, the note from the person giving the jewelry and photos and videos of the wedding. And thirdly, if you bought it yourself but lost the bill, then in that case, bank statement, record of check or credit card payment, property details in old ITR or a duplicate receipt issued by a goldsmith. Apart from this, photo of the old jewellery, estimated weight, a slip from the goldsmith and a confirmed bill for the new jewelery in which the account of the old gold is written.
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Start keeping track of ancestral gold
To avoid any kind of legal complications, the family can prepare a simple record of their old jewelery from today itself. Take separate clear photographs of jewelery like necklace, bangle, bracelet etc and write its name. Measure and record the current weight of each piece of jewelry and record who it was acquired from and approximately what year it was found. Whenever any jewelery is given from one member to another in the family, make a record of it. Get a valuation certificate of the current purity, weight and value of the jewelery from a government recognized jeweller. Keep in mind that this is proof of today's situation. Not those purchased 30 years ago, so keep old family documents also with you.