Gold has immense cultural and historical significance in India for several reasons. These range from religious connotations, where gold is used in several religious ceremonies, and devotees make donations of gold to their preferred deity.
Gold is also a popular family heirloom, with ornaments and jewellery passed down through the generations. It is also considered an auspicious gift to give to family and friends. Thanks to its ever-growing value, it is often seen as a status symbol. Lastly, purchasing this metal is often seen as an investment.
Often, gold is cheaper to purchase outside India (in places like Dubai). It is common for Non-Resident Indians (NRIs) and others to bring gold when they arrive in the country from abroad. However, it is essential to be aware of the rules, regulations, and customs duties on gold. In this article, we will cover what the rules, regulations, and import duties for gold include.
What is Customs Duty?
Before discussing the regulations surrounding gold, it is essential to understand customs duties. In India, the government levies a certain amount on imports and some exports from the country. Factors that affect this amount include the value of the item, its weight, dimensions, and more. As per the Customs Act of 1962, the government can impose duties on any important and expires, prohibit importing or exporting certain goods, impose sanctions, and more.
Custom duties also generate government revenue, finance public services, and aid infrastructure development. They aim to protect domestic industries, implement economic policies, and more.
What is the Custom Duty on Gold?
Many people may buy gold outside the country thanks to lower taxes and other charges on the metal. Customs duty on gold refers to a certain amount levied by the Indian government to increase revenue and regulate the flow of goods to and from the country. If you are planning to buy gold from abroad and bring it into the country, it is essential to be aware of the different import duties applicable to it.
Gold is a precious asset. Therefore, bringing it in or out of the country is strictly regulated to balance India’s economy. India’s customs department has specifications regarding how much gold you can get with you, the duties involved, and any exemptions. For example, there are regulations regarding the types of gold you can bring, how much you can carry, and more.
What Types of Gold are Allowed?
Under the Passport Act of 1967, Indian passengers are allowed to carry all types of gold materials. When shopping for gold abroad, most prefer gold bars, jewellery, and coins. When entering the country, however, you will be given a form to fill out regarding the gold you carry. You must declare the type of gold you have and the amount and value. Based on this, customs officers will calculate the duty you must pay.
How do you calculate the Customs Charges on the Different Types of Gold?
Depending on the different quantities, there are a few different rates of import duties on gold. These include:
– Less than 20 grams of gold bars: No customs charges will be levied for this amount.
– Gold bars weighing between 20 and 100 grams: A customs duty of 3% will apply to this amount.
– Gold bars weighing one kilo: A 10% customs charge will be levied on this amount.
– 100 grams of gold coins: A customs duty of 10% will be levied on gold coins of this weight.
– Gold coins weighing between 20 to 100 grams: A customs charge of 10% applies to these.
– Less than 20 grams of gold coins: No customs charges will be levied for this amount.
How can you Calculate Customs Duty on Gold in India?
The calculation of customs duty on gold is done according to the 2007 Customs Valuation Rules (Determination of Value of Imported Commodities). According to these regulations, the factors that authorities use to calculate the price of gold include:
– The type of gold (coins, bars, or jewellery)
– The quantity of gold
– The purity of the gold
– The selling price of the item in the country it is being imported in
In the 2024 Union budget, India’s Finance Minister Nirmala Sitharaman announced reduced customs duties on gold, platinum, and silver. The duties dropped from 15% to 6%, and this vast reduction led to a sharp decline in the price of gold. The metal is now significantly cheaper for those wanting to purchase it abroad and return it to India.
What are the Limits on Duty-free Gold?
Apart from the type of gold, there are also certain limits regarding the amount of duty-free gold you can carry when returning to the country. This varies based on the passenger.
1. For male travellers
Male passengers can carry 20 grams of duty-free gold with them from abroad. They are not required to pay any duties on gold worth Rs. 50,000. Other import duties regarding gold include:
– 20 to 50 grams of gold: A 3% customs charge will be levied.
– 50 to 100 grams of gold: A 6% customs duty will be levied.
– Quantities exceeding 100 grams: A 10% customs charge will be levied.
2. For female travellers
Female travellers are allowed to bring in 40 grams of duty-free gold. They are also not required to pay customs duties for up to Rs. 1 lakh worth of gold. Other import duties include:
– 40 to 100 grams of gold: A 3% customs charge is levied.
– 100 to 200 grams of gold: A 6% customs charge is applicable.
– Quantities exceeding 200 grams: A 10% customs charge is levied.
Wrapping up
Buying gold abroad can help you get better quantities for cheaper prices. Additionally, bringing it back into the country has become less expensive following the 2024 Union Budget. Gold is an excellent option if you are looking for a good investment for your wealth. If you want gold, consider an instant online loan from Tata Capital. We offer attractive interest rates for personal loans, collateral requirements, and zero charges on part pre-payment. To get started, visit the Tata Capital website or download the app today!
10 December 2024
5 mins read
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