Gifts & Family

Selling gifted or wedding jewellery, and the tax on it

The gold was gifted to you, at your wedding or by family, and now you want to sell some of it and are unsure what, if anything, is taxed.

You have gold or jewellery that came to you as a gift, wedding jewellery, pieces from parents or grandparents, and now, living abroad, you want to sell some of it. Two worries surface: whether receiving it was taxable and whether selling it now is, and if it is, what you are supposed to treat it as costing when you never paid for it. For jewellery received the way most families give it, the receipt was not taxed, and the sale is usually a small, manageable gain.

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Last reviewed: 26 July 20267 min readReviewed by Preetesh Maloo, CA

The short answer

Jewellery received on the occasion of your marriage is exempt on receipt with no limit, and jewellery from a relative is exempt whatever its value; only jewellery from a non-relative outside the marriage occasion, over ₹50,000 in a year, is taxed when received. When you later sell it, your cost is what the person who gave it to you paid for it (or its 1 April 2001 value for very old pieces), and their holding period counts as yours, so a grandmother's necklace is long-term from her time, not the wedding. For an NRI the long-term gain is 12.5% without indexation. There is no property-style 1% TDS on jewellery, though a buyer paying a non-resident a taxable gain is technically required to deduct under Section 195.

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Related situations

Receiving the jewellery was usually not taxed

Jewellery is treated as property for the gift rules, but the common family situations are exempt. A gift received on the occasion of your marriage is exempt on receipt with no monetary limit, and the occasion is read around the wedding, not only the ceremony day, so wedding jewellery and streedhan are not taxed when received (Section 56(2)(x)). A gift from a relative, the defined list covering parents, siblings, grandparents and their spouses, is likewise exempt whatever it is worth.

The only case that is taxed on receipt is jewellery from a non-relative, outside the marriage occasion, where the total value in the year crosses ₹50,000, and then the whole amount is taxed as income from other sources. So a colleague gifting you an expensive piece for no occasion could be caught, but the wedding and family gifts that make up most people's jewellery are not.

What the jewellery is treated as costing on sale

Because you never paid for gifted jewellery, the natural question is what your cost is. The law carries the giver's cost across to you (Section 49(1)): what the person who gifted it to you originally paid for it becomes your cost. For pieces bought before 1 April 2001, you can use their value on that date instead.

Just as important, the giver's holding period counts as part of yours (Section 2(42A)), so a necklace a grandmother held for decades is long-term in your hands from her time, not from the day of your wedding. And in the rare case where the receipt was taxed, a non-relative gift over the threshold, the value that was taxed then becomes your cost instead (Section 49(4)), so the same value is never taxed twice.

The gain, and the TDS reality

On sale, jewellery held more than twenty-four months produces a long-term gain, taxed for an NRI at the flat 12.5% with no indexation for sales on or after 23 July 2024 (Section 112). Because the cost carries from the giver, often at a much older and lower price, the gain can look large on paper, but the long-term rate and, for old pieces, the 2001 value keep the actual tax modest.

On TDS, jewellery is not immovable property, so the 1% property rule does not apply and there is no dedicated buyer-deduction on a jeweller's purchase. Strictly, a buyer paying a non-resident a sum that contains a taxable gain should deduct under Section 195, but in practice bullion dealers rarely do on an over-the-counter sale. Either way, the gain is yours to report, and a practising CA computes it with the carried-over cost so you pay the right amount and no more.

What's involved

What the CA actually does

1
We confirm the receipt was exempt
We check that the jewellery came as a marriage gift or from a relative, so the receipt is not taxed, and flag the rare non-relative case that would have been.
2
We establish the carried-over cost
We trace what the giver paid, or the 2001 value for old pieces, so your cost is right and the gain is not overstated as the whole sale price.
3
We compute the gain at the NRI rate
We work the long-term gain at the flat 12.5% rate with the giver's holding period counted, so the piece is treated as long-term and taxed correctly.
4
We handle the return and any TDS
We report the gain on your return and reconcile any Section 195 TDS a buyer did deduct, so any excess comes back.

What to have ready

Documents you'll typically need

Details of the jewellery and roughly when the giver acquired it
Any purchase record the giver had, or a valuation for old pieces
Proof of the marriage occasion or the relationship, for the receipt
The sale invoice or dealer statement

Your destination country can change the details

Requirements differ from one consulate, university and visa route to the next, how recent the figures must be, how long funds must have been held, and which certificates are mandatory. We assemble the documents around the exact checklist you're applying under. To see how India's tax treaty with your country of residence affects related filings, set your country below or compare all 46 countries.

References on this page

Section 56(2)(x): gifts on the occasion of marriage, and from relatives, are exempt on receipt
Section 49(1) and Section 2(42A): the gift carries the giver's cost and holding period on a later sale
Section 49(4): if the receipt was taxed under Section 56(2)(x), that value becomes the cost
Section 112: long-term jewellery gains at 12.5% without indexation for an NRI (post 23 Jul 2024)

Frequently asked questions

Common questions

No. Gifts received on the occasion of your marriage are exempt on receipt with no limit, and gifts from a relative are exempt whatever their value. Only jewellery from a non-relative outside the marriage occasion, over ₹50,000 in a year, is taxed when received.

The cost of the person who gave it to you (Section 49(1)), or its 1 April 2001 value for very old pieces, and their holding period counts as yours (Section 2(42A)), so gifted jewellery is usually long-term from the giver's time.

A long-term gain, on jewellery held more than 24 months, is taxed for an NRI at the flat 12.5% with no indexation for sales on or after 23 July 2024, computed on the carried-over cost. The old cost can make the gain look large, but the long-term rate and 2001 value keep the actual tax modest.

There is no 1% property-style TDS on jewellery. Strictly, a buyer paying a non-resident a taxable gain should deduct under Section 195, but bullion dealers rarely do on an over-the-counter sale. Either way you report the gain on your return.

The exceptions that change the answer

Where the general rule stops applying to you

Every rule below has a carve-out, a cut-off date or a condition that flips the answer. These are the ones that decide real cases.

Taxable gift threshold under s.56(2)(x)

Right now: Rs 50,000 aggregate in a financial year

Where it works differently

The giver is a 'relative' as defined: No limit and no tax, whatever the amount.; Explanation to s.56(2)(x). The definition includes spouse, siblings, siblings of spouse, siblings of either parent, lineal ascendants and descendants, and their spouses.
The gift crosses Rs 50,000 from a non-relative: The WHOLE amount is taxable, not just the excess.; The threshold is a cliff, not an allowance.
Received on marriage, under a will, or by inheritance: Exempt regardless of amount or relationship.; Proviso to s.56(2)(x).
A resident gifts to a non-relative NRI: FEMA applies separately from tax. Satisfying s.56(2)(x) does not make it FEMA-compliant.; Two independent regimes: one under the Income-tax Act, one under FEMA.

Commonly got wrong

Only the amount above Rs 50,000 is taxed. The entire sum becomes taxable once the threshold is crossed.Cross Rs 50,000 and the whole gift is taxable.
A cousin is a relative. Cousins are NOT within the statutory definition.Relative means spouse, brother or sister, brother or sister of the spouse, brother or sister of either parent, any lineal ascendant or descendant of you or your spouse, and the spouse of any of these. Cousins are not on the list.

TDS rate when buying property from an NRI

Right now: 12.5% plus surcharge and cess on LTCG

Where it works differently

The gain is short-term: TDS is at the applicable slab rate, effectively 30% plus surcharge and cess for most NRI sellers.; s.195 requires deduction at 'rates in force' for the actual character of the income.
No lower-deduction certificate is obtained: TDS applies to the ENTIRE SALE CONSIDERATION, not to the gain.; s.195 operates on the sum paid unless the AO determines otherwise. This is the whole commercial case for Form 13 / Form 128.
There are joint NRI sellers: TDS is deducted separately against each seller's PAN in their ownership proportion.; Rule 37BA. Deducting entirely against one PAN strands the other's credit.
The buyer deducts 1% under s.194-IA: Wrong section. The buyer becomes an assessee-in-default under s.201 for the shortfall plus 1% per month interest and penalty under s.271C.; s.194-IA applies only where the seller is a RESIDENT.

Commonly got wrong

TDS on property purchase is 1% over Rs 50 lakh. That is s.194-IA, for RESIDENT sellers only. For a non-resident seller it is s.195 at the full capital-gains rate, with no threshold.1% applies only if the seller is a resident. NRI seller means s.195 at 12.5% plus surcharge and cess on the whole consideration unless a certificate is obtained.
The buyer files Form 26QB. 26QB (now Form 141) is for s.194-IA. An NRI-seller purchase needs a TAN and Form 27Q (now Form 144).Buying from an NRI, you need a TAN, you deduct under section 195, and you file Form 27Q (Form 144 from 1 April 2026). Form 26QB is only for resident sellers.

If this matched your situation, these go further

Gifts between an NRI and family in India, when they are tax-free and when they are taxed Selling a property that was gifted to you, and what it counts as costing Your shares or dividends went to the IEPF, and how to get them back Inherited Indian property tax NRI ITR filing (we file for you)DTAA TDS recovery Capital gains calculator

Selling gold that was gifted to you?

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