Gold Storage Rules: In India, there is frequent misunderstanding regarding the supposed 500-gram gold limit for married women. Many assume that married women are not allowed to own more than 500 grams of gold, but this belief is unfounded. In reality, Indian law does not impose any restriction on how much gold a person can keep. The so-called 500-gram rule only relates to the guidelines for non-seizure of gold jewellery by the Income Tax Department during their raids.

Gold Storage Rule Update

A recent development saw the Supreme Court addressing this matter. Through its order dated 2 November in State of Bihar vs. Phulpari Kumari, the Supreme Court clarified that the exemption threshold for gold jewellery during searches does not serve as evidence regarding the origin of the gold in cases of disproportionate assets.

What does the 500 gram gold rule signify for married women?

On 11 May 1994, the Central Board of Direct Taxes (CBDT) released Instruction No. 1916, which provides guidelines regarding the seizure of gold jewellery during Income Tax Department searches.

The directive specifies the following limits below which gold jewellery typically owned by family members will not be seized:

– Married women: 500 grams
– Unmarried women: 250 grams
– Male family member: 100 grams

Nevertheless, based on factors like a family’s social standing, customary practices, and specific circumstances, the officer conducting the search may opt not to seize jewellery even if these amounts are exceeded. Regardless, a detailed inventory of all jewellery discovered must be prepared by the officer. These guidelines pertain only to what jewellery may be seized during a search, not to general legal ownership, and therefore do not represent a statutory limit on gold possession.

Is it permissible for a married woman to own more than 500 grams of gold?

Indeed, there is no statutory ceiling in India on the amount of gold a woman may own, even if it exceeds 500 grams. When gold has been either inherited or bought with verifiable, legitimate funds, there is no restriction on how much may be held.
A clarification from the Finance Ministry, disseminated by the Press Information Bureau (PIB) on 1 December 2016, also confirmed that as long as the gold jewellery or ornaments are acquired with known sources of income or inherited, there is no cap on how much can be held.

What clarification did the Supreme Court provide on 2 November?

This particular case centres on Phulpari Kumari from Bihar. In May 2015, authorities launched a vigilance case against her alleging that her assets were disproportionate to her known income. By July 2020, formal charges were brought under sections 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988.

Following this, the Special Vigilance Court in Patna took judicial notice of the case on 28 January 2021. In response, Phulpari Kumari contested this step before the Patna High Court, referencing both the CBDT’s guidelines and the Finance Ministry’s clarification about gold.

The Patna High Court decided to dismiss the proceedings on 14 May 2026. Its judgment noted that Phulpari Kumari and her unmarried daughter collectively held 646,400 grams of gold jewellery, which fell within the CBDT’s non-seizure guideline of 750 grams for both.

On 2 November, Justices K.V. Vishwanathan and Arun Palli, sitting as a bench, set aside the High Court’s order. The Supreme Court clarified that the CBDT’s non-seizure threshold does not automatically establish the source of gold as legitimate in a disproportionate assets investigation. As a result, the special judge’s decision to take cognisance of the matter was reinstated, permitting legal proceedings against Phulpari Kumari to resume. Nevertheless, this Supreme Court ruling does not equate to a conviction; she retains the right to present other legal defences during her trial.

Has the Supreme Court altered the 500 gram guideline?

No changes have been made to the 500 gram guideline through this Supreme Court decision, nor has the CBDT’s guidance been revoked or amended. This rule remains applicable to the seizure of gold jewelry during Income Tax Department searches.