Gold Gifted by Your Employer: Tax Rules When You Sell It

Gold Gifted by Your Employer: Tax Rules When You Sell It

Gold coins, biscuits and jewellery are common gifts given by employers in India - at Diwali, on performance milestones, or at retirement. While the gift itself is a welcome recognition, many employees are unsure whether it is taxable when received, and what tax applies when they later sell it.

The answer is different from family gold gifts - employer gifts have less generous tax treatment.

At a Glance

Tax on Gold Received as an Employer Gift

Under Section 17(2)(viii) of the Income Tax Act, gifts from an employer are treated as perquisites - part of your salary income. The rules:

• If total gifts from the employer in a financial year are ₹5,000 or less: fully exempt
• If total gifts exceed ₹5,000: the entire value (not just the excess) is added to your taxable salary

Example: Your company gifts you a 10g gold coin at Diwali. At today's rate, it is worth ₹1,52,500. As this exceeds ₹5,000, the entire ₹1,52,500 is added to your salary income and taxed at your slab rate (20%, 30%, etc.).

The employer will typically report this in Form 16, and TDS may be deducted.

Capital Gains When You Sell Employer-Gifted Gold

When you later sell the gold:
• Cost of acquisition = Fair Market Value (FMV) on the date you received the gift
• Holding period = from the date the gift was received
• If held 24+ months from receipt: 12.5% LTCG on the gain
• If held under 24 months: profit added to income at slab rate

Note: The FMV is typically the IBJA market rate on the date the gift was given. Keep a record of the FMV on the date of receipt for your tax calculation later.

Worked Example

You received a 10g 24K gold coin from your employer on Diwali 2023. The IBJA 24K rate on that date was ₹6,200/g. FMV = 10 × ₹6,200 = ₹62,000.

You sell it today at ₹1,52,500 (₹15,250/g × 10g).

Capital gain = ₹1,52,500 − ₹62,000 = ₹90,500
Holding period: Diwali 2023 to now = 24+ months → LTCG
Tax: ₹90,500 × 12.5% = ₹11,312

Also, the ₹62,000 was already taxed as salary perquisite when you received it - so you are not double-taxed on the base value.

Why Choose Attica Gold Company

Attica Gold Company is ISO 9001:2015 certified with 200+ branches across Karnataka, Tamil Nadu, Andhra Pradesh, Telangana and Pondicherry. Your wait is over.

Frequently Asked Questions

Is gold received from my employer taxable?

Yes - if the total value of gifts from the employer exceeds ₹5,000 in a year, the full gift value is added to your taxable salary.

What is the cost basis for selling employer-gifted gold?

The fair market value (IBJA rate) on the date you received the gift.

How long must I hold employer-gifted gold for LTCG?

24 months from the date you received the gift. After that, 12.5% LTCG applies.

Does my employer deduct TDS on gold gifts?

They may deduct TDS if the gold gift is treated as a perquisite exceeding ₹5,000. It will appear in Form 16.

Is this different from gold gifted by family members?

Yes - family gifts at marriage are exempt from perquisite tax. Employer gifts above ₹5,000 are taxable as salary.

Do I need to report employer gold gifts in my ITR?

Yes - if TDS was deducted, it appears in Form 26AS. Report the perquisite in your salary income. Report the capital gain when you sell.

Can I sell employer-gifted gold at Attica Gold?

Yes - the same process as any gold sale. Aadhaar + PAN (if > ₹2L). Keep the receipt for your ITR.