Many families discover gold jewellery in a parent’s locker after their passing — and The first doubt is always the same:
“Will this create income-tax problems if I sell it?”
Here is the clear, factual answer.
🔹 Q1: My mother never filed an ITR. If I sell her gold, will I face trouble?
Short answer: Generally, NO.
Indian mothers accumulate jewellery over an entire lifetime:
via wedding gifts, festival gifts, small purchases, family traditions.— the Income Tax Department usually accepts it without questioning.
🔸 Remember:
Inheritance is NOT taxable in India.
You can receive gold, money, or property from your parents 100% tax-free.
🔹 Q2: When does tax actually apply?
You pay tax only when you SELL the inherited gold.
Keeping the jewellery → No tax.
Selling it → Capital Gains Tax on profit.
🔹 Q3: How is Capital Gains calculated on inherited gold?
If your mother + you together held the jewellery for more than 2 years then it become LONG TERM ASSET.
Meaning:
Tax = 12.5% on the profit
Profit = Sale Price – Your Mother’s Cost
If the jewellery is old (before 1 April 2001), you can use:
✔ Market value as on 1 April 2001
as the cost.
(This usually helps reduce tax.)
🔹 Q4: Will the tax officer question me since my mother never filed returns?
They may ask, but only if:
The gold quantity is very large,
Family background doesn’t match the amount,
No reasonable explanation exists.
In regular, middle-class and upper-middle-class cases, there is no issue at all.
🔹 Q5: When can it become a problem?
Only in extreme cases where:
⚠ You cannot explain the source of the gold
⚠ The quantity/value is far beyond the family’s known means.
Then the Income Tax department may treat it as unexplained income.
This can attract 60% tax + surcharge + penalty
But this happens only in extreme cases, not ordinary inherited jewellery.
🔹 Q6: What should families do BEFORE selling inherited gold?
✔ Keep old bills, if available
✔ Keep proof of gifting (wedding album, old photos, family records)
✔ Clarify in your ITR that the sale is of inherited jewellery
✔ Pay the rightful Taxes honestly.
These simple steps ensure complete peace of mind.
FINAL WORD :
Receiving inherited gold is tax-free.
Selling inherited gold is taxable only on the profit.
If the jewellery looks like something your mother could have collected over her lifetime…
You are absolutely safe.
Most families worry unnecessarily — the rules are actually simple when explained correctly.
DISCLAIMER :
This is general educational information, not personalised tax advice. Please consult your CA for case-specific guidance.
Regards,
Srikanth Matrubai
AMFI Registered Mutual Fund Distributor ARN-51423
QPFP
NISM Certified Retirement Advisor
All the best,
Regards,
Srikanth Matrubai
https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/
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