With Budget 2026 round-the-corner, India’s obsession with gold is back in focus. After a blockbuster rally in gold prices since the last budget, the questions being asked are: Will the Union Finance Minister Nirmala Sitharaman announce any proposals around gold on Sunday, February 1?
Will there be new limits imposed on how much gold one can legally keep at home? Or, will there be a new reporting mechanism in the income tax form to declare how much gold one can own?
We will look at that later. First, the impact that gold and silver’s performance has had on the Indian investors.
Gold and Silver’s Performance
The prices of gold and silver have surpassed all forecasts and reached unprecedented highs. Gold price in India is close to Rs 1.67 lakh per 10 grams of 24 carat, while the silver rate in India touched Rs 3.47 lakh per kg. These are the spot prices on MCX.
A flash fall in gold and silver prices happened on Friday, but the industry experts feel there is still potential left for a rebound amidst intermittent corrections.
So, despite the big crash, how much have gold and silver prices risen? Last year, on Budget 2025, in Delhi, the gold rate was Rs 84,000 per 10 grams for 24 carat and the silver rate on February 1, 2025, was Rs 99,600/Kg.
Since the last budget 2025, the gold price has jumped 100%, and silver has gained 250%.
But what could be there in the budget 2026 proposals for gold investors? Before that, let us see why the Budget 2026 proposals are important for Indian families. For that, let us look at the quantum of gold held by Indians.
Gold with Indian Families
It is estimated that Indian families hold over 34,600 tonnes of gold, more than what global central banks hold in total. Central banks now officially hold 32,140 tonnes of gold as of December 2025. The RBI has been a big buyer in recent times and its total gold holdings stand at a record 880.2 tonnes.
With gold price on a spree, the value of gold holdings by Indians has undoubtedly gone up — doubled, and tripled over the last few years. Some estimates put the total gold holdings of Indian households at $3.8 trillion.
Now comes the legal limits and conditions that govern the maximum amount of gold that one can buy.
How much gold can one keep at home?
Income Tax Law allows no limit on holding of gold jewellery or ornaments by anybody, provided it is acquired from explained sources of income, including inheritance. The government has also clarified that jewellery and ornaments weighing up to 500 grams for married women, 250 grams for unmarried women, and 100 grams for men will not be seized, regardless of their match with the individual’s income records.
To be clear, as far as seizure is concerned, the officer searching has the discretion not to seize even a higher quantity of gold jewellery based on factors including family customs and traditions. Importantly, married ladies receiving jewellery in the form of ‘stree dhan’ during their long married life on various occasions, like the birth of a child, birthdays, marriage anniversaries, etc., and accumulated over the years, are excluded.
Will there be changes in limits?
Will the Budget 2026 propose a change in the limits? Here are some views from the tax experts:
Sonam Chandwani, Managing Partner at KS Legal & Associates, says, “Any proposal to revise household gold limits in the Budget would need to strike a balance between policy intent and ground realities. Gold holdings in Indian households are largely legacy assets acquired over decades, often through inheritance or customary practices, and imposing tighter limits or abrupt changes could create uncertainty and compliance challenges.
If changes are introduced, they are more likely to revolve around reporting thresholds, valuation norms, or disclosure mechanisms, instead of altering what households can legitimately hold. A move towards hard limits could invite avoidable disputes and implementation hurdles.”
Deepashree Shetty, Partner, Global Mobility Services, Tax and Regulatory Advisory, BDO India, says, ” The Budget may introduce additional reporting requirements in the ITR form. Currently, Schedule AL requires an eligible taxpayer to report the amount of jewellery held during the year. The limit on holding gold applies in case of search/raids, but a higher quantum could be held with back-up documentation.
It is to be noted that the erstwhile Gold Control Act was repealed in 1990 as the Government found it difficult to curb the black market around gold. Given the current surge in gold prices and the ever-enduring need to buy gold, the self-reporting requirement may be an initial step to begin with. Tax rules on the sale of gold may be relaxed to provide relief to taxpayers.”
Dr. Renisha Chainani, Head of Research, Augmont, says, “It’s unlikely that the Union Budget will propose limits on how much gold a family can own. India does not currently cap private gold holdings, and imposing limits could be hard to enforce and unpopular. Instead, the Budget may focus on tax and reporting reforms to curb unaccounted gold imports and improve transparency. Policymakers might also encourage digital and financial gold products rather than restricting physical gold ownership, aiming to shift savings into formal channels without penalising traditional investors or households.”
Taxation of Gold
There is no tax on inherited gold. But there are other rules and taxes involved in buying and selling gold. If you are buying gold for more than Rs 2 lakh, providing a PAN card is mandatory. Maybe the Budget 2026 could increase this limit.
Now comes the GST. Whether you buy jewellery, gold coins, or gold bars, a 3% Goods and Services Tax (GST) is applicable. And, there’s more. If buying gold jewellery, an additional 5% GST is charged on any separate making charges.
Then, there are taxes on gains. If old gold jewellery is sold after holding it for two years, the LTCG tax of 12.5% will be applicable without any indexation benefit. On Short-Term Capital Gains, the tax rate has been increased to 20% from 15%.
In the case of a Gold ETF, Short-Term Capital Gains (STCG) Tax is applied if held for less than 12 months. Gains are taxed as per the tax slab. If held for more than 12 months, a flat rate of 12.5% is payable on the Long-Term Capital Gains (LTCG) Tax.
There are big expectations from the Budget 2026 when it comes to gold. Let us see how the government manages to help Indian families create wealth by investing in gold.