Selling inherited gold as an NRI: the capital gains, and how to prove a cost with no receipt.

Start with the reassuring part: inheriting gold in India is not a taxable event. India abolished its inheritance and estate tax decades ago, so when your mother's jewellery, or a relative's gold, passes to you by will or as a legal heir, nothing is taxed and nothing goes on your return as income. You can receive it, hold it, and keep it for years with no Indian tax consequence at all.

The tax question arrives only when you sell. At that point the profit, not the whole value, is charged as capital gains, and the rest of this page is about how that gain is worked out. The two things that decide it are the holding period, which sets whether the gain is long-term or short-term, and the cost of acquisition, which is where families with old, unbilled jewellery get stuck.

For an NRI there is one more layer on top, because the reliefs a resident leans on to soften a capital gain are not all available to you, and the way the money leaves India has its own rules. Take the pieces in order and it is manageable; skip the cost-proof step and you can end up taxed on far more gain than you actually made.

When you sell, the first question is whether the gain is long-term or short-term, and the answer depends on how long the gold was held, counting the previous owner's years as well as your own. Because you inherited it, the clock does not restart on the day it became yours; the period your parent or the earlier owner held it is added to yours.

If that combined holding is more than 24 months, the gain is long-term. For a sale on or after 23 July 2024, long-term gains on gold are taxed at a flat 12.5%, plus surcharge and cess, with no indexation, the inflation adjustment that used to lift your cost has been removed. If the combined holding is 24 months or less, which is rare for genuinely inherited pieces, the gain is short-term and simply added to your income at your slab rate.

The gain itself is the sale value minus your cost of acquisition and the direct costs of sale. The sale value is what you actually receive from the jeweller or buyer. The cost is the piece most people get wrong, and it is worth its own section, because getting it right is usually the difference between a fair tax bill and paying tax on decades of price rises that were never really your gain.

Here is where inherited gold gets genuinely tricky. To work out the gain you need a cost, and old family jewellery almost never comes with a purchase receipt. The law has a route through this, but you have to use it deliberately.

Because you inherited the gold, your cost of acquisition is not zero; it is the cost to the previous owner, under Section 49(1). So if your mother's original purchase price is known, that is your cost. When the gold was acquired before 1 April 2001, or the original cost simply cannot be established, the law lets you instead take the fair market value as on 1 April 2001 under Section 55, and for old inherited gold that 2001 value is almost always both available and higher than any ancient purchase price, which lowers your taxable gain.

In practice this means one concrete step: get a registered valuer to certify the fair market value of the gold as on 1 April 2001, worked out from its weight and purity at 2001 gold rates, and keep that report. It is your evidence of cost. The assessing officer can refer a claimed value to a departmental Valuation Officer if it looks inflated, so the valuation has to be honest and defensible, not optimistic. Treat the valuer's report as the single most important document in the whole sale, because without a cost you can be taxed as if the entire sale price were gain.

For an NRI, three things differ from a resident selling the same gold. Two of them cost you money, and one is a process you have to drive yourself.

First, the reliefs are thinner. The 1.25 lakh long-term exemption is for listed equity and equity funds under Section 112A, not gold, so it does nothing here for anyone. And the rule that lets a resident set their unused basic exemption limit against special-rate capital gains does not extend to a non-resident, so an NRI's long-term gain on gold is taxed at the flat 12.5% from the first rupee, with no tax-free slice underneath it. The same sale can cost an NRI more tax than a low-income resident selling identical gold.

Second, the TDS position is not what you might expect, and getting it wrong is costly. There is no property-style automatic deduction on gold, no equivalent of the 1% a property buyer takes, so the counter can feel like a clean cash sale. But because you are a non-resident, Section 195 can apply: a business or jeweller buyer who knows you are an NRI is required to withhold tax on the taxable gain, and Section 195 carries no threshold. The catch is that a buyer who cannot compute your gain may deduct on the whole sale value and over-withhold badly, which is exactly why the fix is to get a lower or nil-deduction certificate on Form 13 under Section 197 (renumbered Section 395, Form 128 under the Income-tax Act 2025), so only the real tax is taken and you are not chasing a refund for a year. Where a small informal buyer deducts nothing, the duty simply shifts to you: pay the capital gains through advance tax and your return. Either way the tax is due, and an NRI selling a meaningful quantity of gold will have an Indian filing to make; treating "nothing was deducted" as "nothing is owed" is how these sales turn into notices later.

Third, getting the money out runs through your NRO account. The sale proceeds are credited there and are repatriable within the USD 1 million per financial year limit for NRO balances, with a CA's certificate in Form 15CA and 15CB, which become Forms 145 and 146 under the Income-tax Act 2025, confirming the tax is settled first. The bank will want to see how you came to hold the gold, so the inheritance proof and the valuer's report do double duty, they support your cost for tax and your source of funds for the remittance.

The whole tax outcome on inherited gold turns on documents, and the time to gather them is before the sale, not after a query lands.

Get the 1 April 2001 valuation done early, from a registered valuer, if the gold is old or its original cost is unknown. This single report sets your cost, and therefore your gain, and it is far easier to obtain calmly in advance than to reconstruct under pressure. Keep proof of how the gold came to you as well, the will, the succession document, or a clear family record, because it establishes both that you inherited it and when the previous owner's holding began.

At the sale itself, keep the buyer's invoice or receipt showing the weight, purity and amount paid, since that is your sale value. Then compute the gain honestly against the valuer-certified cost, pay the tax through advance tax or self-assessment, and file your Indian return. With the valuation, the inheritance proof and the sale invoice in hand, both the tax computation and the NRO repatriation are straightforward. Without them, a simple sale of family gold can become a drawn-out argument with the tax office over a cost you can no longer prove.