NRI Tax on Selling Physical Gold and Jewellery in India: The 24-Month Rule, Inherited Bangles With No Bill, TDS and Getting the Money Out

A reader in Toronto messaged me last month with a problem that has nothing to do with markets and everything to do with paperwork. Her mother had passed, and she had come away with roughly 600 grams of gold jewellery, bangles and necklaces accumulated across forty years of weddings and festivals, not one of which came with a bill. She wanted to sell it, pay whatever tax was due, and move the money to Canada. Her first question was the one almost everyone asks and almost everyone gets wrong: "There is no purchase receipt, so how do they even know what I paid, and what stops the tax officer from treating the whole sale value as my gain?"

The 30-second answer: Physical gold and jewellery are capital assets. For an NRI, gold held more than 24 months and sold on or after 23 July 2024 is long-term, taxed at 12.5% with no indexation, plus surcharge and 4% cess; held 24 months or less it is short-term at your slab rate. There is no Rs 1.25 lakh exemption on gold. Inherited gold takes the previous owner's cost and holding period, so it is almost always long-term, and gold acquired before 1 April 2001 can use the fair market value on 1 April 2001 as cost. The buyer should deduct TDS under Section 195 on the gain. Proceeds go to your NRO account and repatriate up to USD 1 million a year via Forms 15CA and 15CB.

This is part of the broader picture of how an NRI files and pays Indian tax; if you are pulling your whole return together, start with the ITR filing guide for NRIs, AY 2026-27 and treat this as the deep dive on the gold line.

This guide assumes you already know the NRE versus NRO distinction and roughly what the USD 1 million repatriation cap is; if not, the linked guides cover them. What follows is the part that costs real money and causes real anxiety: how the gain on physical gold is actually computed after the 23 July 2024 overhaul, why inherited jewellery is taxed far more gently than people fear, how to defend a cost when there is no bill, who deducts what at the point of sale, and how to get the proceeds legally out of India. Gold ETFs, gold funds and Sovereign Gold Bonds are taxed on a completely different track, and I will show you where the lines fall, because confusing the two is the single most common mistake I see.

The 24-month rule reset the whole calculation in July 2024

Until 23 July 2024, physical gold in India was a long-term capital asset only after 36 months, and the long-term gain was taxed at 20% with indexation, the inflation adjustment that inflated your cost and shrank the gain. Two things changed on that date and you need both in your head, because outdated articles, and there are many, still quote the old numbers.

First, the holding period for gold to qualify as long-term dropped from 36 months to 24 months. Second, the long-term rate fell from 20% to 12.5%, and indexation was abolished entirely for gold. So the regime now is clean and harsh in equal measure: hold gold for more than 24 months, sell on or after 23 July 2024, and you pay a flat 12.5% on the nominal gain, the raw difference between sale value and original cost, with no inflation relief whatsoever. Hold it for 24 months or less and the gain is short-term, added to your income and taxed at your slab rate.

For property, the law softened this blow by letting resident individuals choose between 12.5% without indexation and 20% with indexation for assets bought before 23 July 2024. That choice was never extended to gold. There is no 20%-with-indexation option for gold for anyone, resident or NRI, on any purchase date. Everyone is on the 12.5%-no-indexation track for long-term gold gains now. So unlike the property guides where the NRI-versus-resident gap is enormous, on gold the headline rate is genuinely the same for you and for your cousin in Pune. The NRI-specific pain on gold is not the rate; it is the TDS mechanics and the repatriation paperwork, which I will come to.

One more thing the old articles get wrong: there is no Rs 1.25 lakh annual exemption on gold. That exemption lives in Section 112A and applies only to listed equity shares and equity-oriented mutual funds. Gold is taxed under Section 112 (for long-term) and at slab rates (for short-term), neither of which carries that allowance. Every rupee of long-term gold gain above your cost is taxed at 12.5%, from the first rupee.

Put real numbers on the straightforward case first. Suppose you, an NRI in the UAE, bought 200 grams of gold coins in 2019 for Rs 9,00,000 with a proper invoice, and you sell them in 2026 for Rs 17,00,000. You held them about seven years, comfortably over 24 months, so the gain is long-term. The gain is Rs 17,00,000 minus Rs 9,00,000 = Rs 8,00,000. No indexation applies. Tax at 12.5% is Rs 1,00,000, plus 4% cess of Rs 4,000, so about Rs 1,04,000, assuming your income does not cross a surcharge threshold.

Now the counterfactual that shows why the date matters. Had you sold the same coins before 23 July 2024 under the old regime, you would have applied indexation. With a cost inflation index that roughly grew the cost from Rs 9,00,000 to about Rs 12,60,000 over those years, your indexed gain would have been around Rs 4,40,000, taxed at 20%, giving roughly Rs 88,000 plus cess. The new regime is simpler but, on a modestly appreciating asset like this one, slightly more expensive: about Rs 16,000 more tax here, because the loss of indexation outweighs the rate cut. On gold that has appreciated sharply, the 12.5% flat rate is the better deal; on gold that has merely tracked inflation, the old 20%-with-indexation method was kinder. You no longer get to choose, so this is now just history, but it explains why your father's old jeweller insists the tax "used to be different".

Inherited gold is taxed far more gently than people fear

Here is the reassurance my Toronto reader needed, and it is the single most important thing in this guide. Inheriting gold is not a taxable event in India. There is no inheritance tax or estate duty. You receive the jewellery, you owe nothing at that moment. Tax arises only when you sell, and even then it is calculated in a way that heavily favours you.

The mechanism is in Section 49(1) read with Section 2(42A). When you sell an inherited asset, your cost of acquisition is what the previous owner paid, not zero and not the sale value, and your holding period includes the previous owner's holding period. So the forty years your mother held those bangles count as your holding period. Inherited gold is therefore almost always long-term, taxed at the gentle 12.5%, and the gain is measured from your mother's original cost, not from the day she died.

This is the exact opposite of what most people assume. The fear is that with no paper trail the tax office will treat the entire sale value as gain. The law does not work that way; it explicitly imports the previous owner's cost. The practical problem is not the rule, it is the evidence: proving what your mother paid for jewellery bought in the 1980s and 1990s with no surviving bills. That is the real fight, and I deal with it in the next section.

There is a powerful relief built in for older gold. If the person you inherited from acquired the gold before 1 April 2001, you are allowed to substitute the fair market value as on 1 April 2001 for the original cost. This is the base-year rule (the base year shifted from 1981 to 2001 a few years ago). For jewellery accumulated across decades, much of it predates 2001, and the gold price on 1 April 2001 was roughly Rs 4,300 to Rs 4,400 per 10 grams, far above the actual prices paid in the 1980s. So the 1 April 2001 fair market value is usually much higher than any original cost, which means a higher cost base, a smaller gain, and less tax. You establish that fair market value with a registered valuer's certificate, and that certificate becomes the document that defends your number.

Walk the numbers through my reader's actual situation, because it is the case everyone faces. She has 600 grams of jewellery from her mother, no bills, sells it in 2026 for Rs 60,00,000 (roughly today's price for 600 grams of 22-carat work). Assume the family can credibly establish that the bulk of it, say 500 grams, predates 1 April 2001, and the rest was acquired across 2005 to 2015.

For the pre-2001 portion, she gets a registered valuer to certify the 1 April 2001 value of 500 grams at the then-price, about Rs 4,350 per 10 grams, giving a cost base of roughly Rs 2,17,500. For the post-2001 portion, 100 grams, the valuer reconstructs an average acquisition cost over 2005 to 2015 at, say, Rs 1,80,000. Her total cost base is about Rs 3,97,500. Her sale value is Rs 60,00,000, less, say, Rs 1,00,000 in assay and selling costs, so net Rs 59,00,000. The long-term gain is Rs 59,00,000 minus Rs 3,97,500 = Rs 55,02,500. Tax at 12.5% is about Rs 6,87,813, plus 4% cess of Rs 27,513, so roughly Rs 7,15,000, plus surcharge if her total Indian income crosses Rs 50 lakh.

Now the counterfactual that shows the stakes of the paperwork. Had she simply panicked, told her CA "I have no bills, just treat the whole thing as gain", and paid 12.5% on the full Rs 59,00,000, the tax would be about Rs 7,37,500 plus cess, roughly Rs 7,67,000. The valuer's certificate, which costs a few thousand rupees, saved her about Rs 52,000 here, and on a holding where more of it was pre-2001, or on a larger sale, the saving runs into lakhs. The lesson is blunt: never accept a zero or near-zero cost base on inherited gold out of documentation panic. The cost base is legally yours; you just have to evidence it.

When there is no bill, a registered valuer is your defence

This is the part no jeweller and few blogs explain, and it is where the anxiety actually lives. The Income Tax Act lets you claim the previous owner's cost or the 1 April 2001 fair market value, but you carry the burden of proving the number if the return is questioned. With no purchase invoice, you build that proof from what you do have.

The cleanest document is a registered valuer's report. A government-registered valuer (registered under Section 34AB of the Wealth Tax Act, the registration tax authorities recognise) physically examines the gold, certifies its purity and weight, and provides a valuation as on the relevant date, whether that is 1 April 2001 for old gold or an estimated acquisition-date value. Their certificate is the evidence the assessing officer expects to see, and it carries far more weight than your own estimate. Get this before you sell, while the jewellery is still in your hands to be examined.

Support it with whatever corroborates ownership and origin: the will, succession certificate, or family settlement deed that traces the gold to the original owner; any old insurance valuations, bank locker records, or wealth-tax returns that listed the jewellery; and photographs from old weddings if it comes to that. None of these alone proves cost, but together they establish that the gold is genuinely inherited and roughly how old it is, which supports a pre-2001 or long-dated acquisition claim.

Understand the separate risk that scares people, because it is real but narrow. There is a CBDT instruction, from a 1994 circular still relied on, that tells officers conducting a search or raid not to seize gold up to certain limits even without bills: 500 grams for a married woman, 250 grams for an unmarried woman, and 100 grams per male family member. This is a seizure-during-search safe harbour, not a tax exemption and not a cap on how much gold you may own. It does not change your capital gains calculation at all. But if your holding is far above these limits and you cannot explain the source at all, an officer can treat the unexplained portion as unexplained investment under Section 69, taxed at a punitive 60% plus 25% surcharge plus cess, near 78%, with a possible 10% penalty on top. That is the nightmare number floating around the internet, and it applies only to gold whose source you cannot explain, not to a normal sale where you have a will, a valuer's report and a clear inheritance trail. Keep the source documented and Section 69 is simply not in play.

One practical point on the sale itself: sell through a reputable buyer who does XRF or assay testing, issues a written invoice, and pays into your bank account, not cash. A bank-channel sale with an invoice creates the audit trail on the sale side that matches your cost documentation on the other side, and it makes the eventual repatriation paperwork straightforward. A cash sale to a back-lane jeweller creates exactly the kind of unexplained credit that draws questions.

TDS at the point of sale, and why gold is less ugly than property

For an NRI selling a capital asset in India, the buyer is generally required to deduct tax at source under Section 195. On property this is the famous trap, because buyers, terrified of getting the gain wrong, often deduct on the entire sale value and freeze lakhs of your money for a year until you file and claim a refund.

Gold is genuinely better here, for a structural reason. Most physical gold is sold to jewellers and organised gold buyers, and the dominant tax mechanism on those transactions is TCS (tax collected at source), not Section 195 TDS. When a jeweller buys gold from a customer, the headline 1% TCS rules that apply to large jewellery purchases do not straightforwardly apply to a customer selling to the jeweller, and in practice the organised buyer's compliance is built around their own books, not around withholding against your capital gain. The result is that, unlike a property buyer, a jeweller usually does not lock up a slab of your sale value. You receive close to the full price and settle the actual capital gains tax yourself when you file your return and pay advance tax.

Where Section 195 does bite is a private or off-market sale to another non-resident or to a buyer who knows you are an NRI and is advised to withhold, or a sale routed through certain bullion dealers who deduct to be safe. If a buyer does insist on deducting under Section 195, the correct base is the capital gain, not the gross sale value, and the rate is 12.5% plus surcharge and cess for a long-term gain. If they threaten to deduct on the whole value, the same fix that works for property works here: apply for a lower or nil deduction certificate under Section 197 (Form 13) before the sale, which fixes the exact amount the buyer must deduct. For most ordinary jewellery sales to organised buyers you will not need it; for a large structured sale where the buyer plans to withhold under 195, it is worth the few weeks.

The honest framing on TDS for gold: do not assume a refund battle. Plan instead to pay advance tax on your gold gain in the quarter you sell, so you are not hit with Section 234B and 234C interest for underpaying advance tax. The money is not withheld for you, which is a relief, but it also means the responsibility to pay on time sits squarely with you.

Gold ETFs, gold funds and SGBs are a different tax animal entirely

Confusing physical gold with paper gold is the error that costs people the most in wrong expectations, so here is the clean separation. The 12.5%-after-24-months rule above is for physical gold: coins, bars, jewellery. Paper gold runs on the mutual fund and securities tax tracks, which were rewritten in 2023 and again in 2024.

Gold ETFs and gold mutual funds got dragged through the Section 50AA debt-fund mess and then partly out of it. Units bought between 1 April 2023 and 31 March 2025 fell under the specified-mutual-fund deeming rule, where any gain was treated as short-term at slab rate regardless of holding period. From 1 April 2025, the "specified mutual fund" definition was narrowed to genuinely debt-heavy funds, which pulled gold ETFs and gold funds out of that trap. For gold ETFs and gold funds, the settled position now is: held more than 12 months, the gain is long-term at 12.5% without indexation; held 12 months or less, short-term at slab rate. Note the holding period is 12 months for the ETF, not 24 months as for physical gold, and there is still no Rs 1.25 lakh exemption because these are not equity funds. So a gold ETF reaches the long-term rate twice as fast as a physical bar, which is a real, often overlooked advantage of paper gold for someone who might sell within two to three years.

Sovereign Gold Bonds are the cleanest gold instrument of all on tax, but mostly closed to NRIs now. If you held to maturity (8 years), the capital gain on redemption was fully exempt under a specific exemption in Section 47, and the 2.5% annual interest was taxable as other income. The catch for NRIs is twofold. First, NRIs cannot buy new SGBs under FEMA rules; you can only continue to hold bonds you bought while resident, or that you inherited. Second, the government discontinued fresh SGB issuance, with the last tranche in late 2024, so this is a legacy holding question, not a buying decision. If you still hold SGBs from your resident days, holding to maturity for the tax-free capital gain is almost always the right move; if you sell early on the exchange, that gain is taxable like other securities, not exempt. For the full picture on the instrument, see the Sovereign Gold Bonds guide for NRIs and the broader gold investment options for NRIs.

Lay the three side by side, because the choice of how you hold gold changes your tax materially.

What you hold	Long-term after	Long-term rate	Rs 1.25 lakh exemption?	NRI-specific note
Physical gold / jewellery	24 months	12.5%, no indexation	No	No 20%-indexed option; settle tax via advance tax
Gold ETF / gold fund	12 months	12.5%, no indexation	No	Reaches LTCG twice as fast; check the 1 Apr 2023 to 31 Mar 2025 window
Sovereign Gold Bond (held to maturity)	n/a	Exempt on redemption	n/a	NRIs cannot buy new; legacy holdings only

Getting the money out: NRO, the USD 1 million cap, and 15CA/15CB

You sold the gold, you paid the tax, and now you want the proceeds in your account abroad. This is where the NRI-specific friction on gold actually lives.

Sale proceeds of an asset held in India by an NRI must be credited to your NRO account, not your NRE account. The NRO account is the rupee account for India-source income, and it is the gate through which repatriation runs. From the NRO account, you can repatriate up to USD 1 million per financial year across all your NRO assets combined, after Indian taxes are paid. That ceiling is not per asset. If you sell gold and a flat in the same financial year, both compete for the same USD 1 million; a Rs 60 lakh gold sale plus a Rs 2 crore property sale will exceed the cap in one year, and you would split the remittance across two financial years.

The paperwork is the gate, and the bank will not open it without two forms. Form 15CA is your own declaration of the remittance, filed online. Form 15CB is a chartered accountant's certificate that the income has borne the correct Indian tax and that the remittance is in order, issued with a UDIN (the CA's verification number). Both are required once your NRO remittances cross Rs 5 lakh in the financial year, which any meaningful gold sale will. The CA who certifies 15CB will want to see your capital gains computation, the valuer's report, the sale invoice, proof the tax was paid, and your NRO account statement. This is precisely why the documentation discipline earlier matters: the same valuer's report that defends your cost base is what lets the CA sign off on the remittance.

The sequence in practice is: sell into the NRO account, pay the capital gains tax (advance tax in the quarter of sale, then square up at filing), get the CA to prepare 15CB, file 15CA yourself, hand both to the bank, and the bank executes the foreign wire up to the USD 1 million limit. The full mechanics, including the documents the bank asks for and how to handle a remittance that straddles two years, are in the NRO repatriation process guide.

Edge cases

Gifted gold, not inherited. If you received the gold as a gift rather than by inheritance, the same Section 49(1) rule applies for cost and holding period if it came from a relative as defined in the Act (parents, spouse, siblings and a few others): you take the donor's cost and holding period. A gift from a non-relative above Rs 50,000 in value is itself taxable as income when received, which is a separate problem from the capital gains on later sale.

Converting old jewellery into new at the jeweller. Exchanging old jewellery for new pieces is, strictly, a transfer of the old gold and a capital gains event on it, even though no cash changes hands. In practice small exchanges fly under the radar, but a large exchange-and-upgrade can be characterised as a sale of the old gold at its value on that day. If the amounts are significant, treat it as a sale for tax.

Digital gold. Digital gold bought through apps is taxed like physical gold, the 24-month, 12.5%-no-indexation track, not like an ETF, because you are notionally holding allocated physical metal, not a security. Do not assume the 12-month ETF holding period applies to digital gold.

Country-of-residence tax on the same gain. India taxing your gold gain does not end the story. The US taxes worldwide capital gains and treats physical gold as a collectible, taxed at up to 28% federally, so a US-resident NRI typically owes US tax on the gain and claims a foreign tax credit for the Indian 12.5% paid. The UK taxes the gain for UK residents, with credit relief for Indian tax under the treaty. The UAE levies no personal capital gains tax, so a Dubai-based NRI faces only the Indian 12.5%. Canada taxes the gain and gives a foreign tax credit. So the same sale can land very differently depending on where you live, and the US collectibles rate in particular can exceed the Indian rate, leaving residual US tax even after credit.

RNOR status. If you returned to India and are in the Resident but Not Ordinarily Resident window, your foreign income is shielded, but a gain on gold located in India is Indian-source income and taxable in India regardless of RNOR status. RNOR does not help on Indian gold.

The closing read

The honest read is that selling gold as an NRI is more about evidence than about tax rate. On the rate, you and a resident are treated the same: long-term gold held over 24 months and sold after 23 July 2024 is 12.5% with no indexation, full stop, with no Rs 1.25 lakh exemption and no 20%-indexed alternative for anyone. The number that decides your actual bill is not the rate, it is the cost base you can defend, and on inherited jewellery with no bill, the law is firmly on your side: you inherit the previous owner's cost and holding period, and you can use the 1 April 2001 fair market value for old gold. The mistake that costs lakhs is paying 12.5% on the full sale value out of documentation panic. So for the common case, an NRI selling inherited gold: get a registered valuer's report before you sell, gather the will or settlement deed, sell through an organised buyer who pays by bank transfer and gives you an invoice, pay advance tax in the quarter of sale rather than expecting a buyer to withhold, and line up your CA for 15CB early so the USD 1 million repatriation does not stall at the bank. The exception who genuinely needs a CA before acting, not a blog, is anyone selling a holding far above the CBDT search limits with a thin source trail, or anyone whose home country (the US, on collectibles) layers a heavier tax on top. For everyone else, the gold sale is very manageable once the paperwork is in order.

Related guides

• Capital gains tax for NRIs on shares and mutual funds
• Selling inherited property as an NRI: the tax
• Capital gains exemptions: Sections 54, 54EC and 54F
• Gold investment options for NRIs
• Sovereign Gold Bonds for NRIs
• ITR filing for NRIs: AY 2026-27
• The NRO repatriation process
• All Taxation guides
• All Investments guides

This guide is educational and general in nature. It is not individual tax advice. The tax on gold depends on your exact holding period, cost evidence, residency and the treaty with your country of residence, and several of these rules changed on 23 July 2024 and again on 1 April 2025, so confirm your specific position with a qualified chartered accountant before you sell or repatriate.