Is It Legal to Sell Gold in India?

Yes, it’s completely legal to sell gold in India, whether it’s jewelry, bars, or coins. However, every sale must comply with laws governed by bodies such as the Reserve Bank of India (RBI), the Income Tax Department, and the Bureau of Indian Standards (BIS). If the transaction is undocumented or exceeds certain thresholds, it may trigger financial scrutiny.

Documents Required to Sell Gold

• PAN Card: Required for transactions above ₹2,00,000.
• Aadhaar or Government ID: For KYC purposes.
• Purchase Invoice: Optional but helps prove ownership.
• Bank Details: Required for direct deposit if applicable.

Tax Implications: Capital Gains on Gold

Selling gold is subject to capital gains tax:

• Short-Term Capital Gain: If held for less than 36 months, taxed at regular income tax slab.
• Long-Term Capital Gain: Held for over 36 months, taxed at 20% with indexation benefit.
• Exemptions: If gold is inherited or gifted, holding period is calculated from original owner’s date of purchase.

GST Rules for Selling Gold

If you are a regular individual selling old gold, GST does not apply. However, if you’re a trader or dealer reselling gold, a 3% GST applies. Understanding this difference is essential for compliance.

Process of Selling Gold in Hyderabad

Here’s what typically happens when you sell gold in Hyderabad:

• Visit a BIS-certified gold buyer.
• They verify the purity using testing machines (karat meters or XRF).
• They check documents and offer a price based on purity and current market rate.
• Payments above ₹2 lakh must be done via cheque or digital modes.

Local Regulations in Hyderabad

Hyderabad has a robust gold market in places like Begum Bazaar, where strict documentation is enforced. Be aware of local norms like mandatory KYC and proper assay certification, especially when dealing with pawn shops or NBFCs.

Legal Risks of Undeclared Sales

Selling gold without documentation may attract legal action including:

• IT raids and asset seizure
• Penalties under the Black Money Act
• Scrutiny under anti-money laundering laws