By Rajesh Londe, Managing Partner, Londe Jewellers Gold & Diamonds, and BIS certified valuer | Published 5 August 2026
Reading time 9 minutes. General information for gold buyers, not tax advice. Every figure on this page is sourced to the Act, the Rules or a Government press release, and the sources are listed at the end.
Most of the confusion clears the moment you stop asking about gold and start asking which rule is being triggered. Here is every threshold a retail jewellery buyer in India can actually run into, in one place.
| What you are doing | Threshold | Rule | Applies to which payment modes |
|---|---|---|---|
| Buying jewellery, coins or bullion, any payment mode | Above Rs 2,00,000 per transaction, quote PAN | Rule 114B, Income tax Rules, 1962 | All. Cash, card, UPI, cheque, bank transfer |
| Paying for that jewellery in cash | Rs 2,00,000 or more cannot be received | Section 269ST, Income tax Act, 1961 | Cash only. Bank modes are unrestricted |
| You do not hold a PAN and the bill goes above Rs 2,00,000 | File Form 60 instead | Rule 114B | All |
| Buying jewellery for Rs 1,50,000, paid in cash | No PAN, no restriction | Neither rule is triggered | All |
| Buying jewellery for Rs 6,00,000, paid by bank transfer | PAN yes, cash bar not engaged | Rule 114B only | Bank modes |
| Jewellery purchase spread over three cash visits for one wedding | Aggregated, treated as one receipt | Section 269ST, clause (c) | Cash only |
| Jeweller paying you for old gold in cash | Above Rs 10,000 in a day is disallowed to the jeweller | Section 40A(3) | Cash only |
| Holding gold at home, whatever the quantity | No limit | No provision imposes one | Not applicable |
Read down the middle column and one thing stands out. There is no Rs 50,000 row anywhere, and there is no Rs 5,00,000 row either, although both numbers are quoted constantly in articles about buying gold. Both are explained further down, and both have a real origin. They are simply not the current rule.
You must quote PAN when a single purchase of goods exceeds Rs 2,00,000, and jewellery is goods. The requirement lives in Rule 114B of the Income tax Rules, 1962, which lists the transactions where a permanent account number has to be quoted. Two details in that sentence are worth holding onto. The first is that the rule is written around goods and services generally, not around jewellery, which is why gold has no special number of its own any more. The second is that it applies regardless of how you pay. A Rs 4,00,000 purchase settled entirely by bank transfer needs PAN exactly as a cash one would.
If you do not hold a PAN, the rule does not shut you out. You file a declaration in Form 60 instead, and the Ministry of Finance described this in its own words when the current thresholds were announced: persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.
What this means at a counter in Nagpur is simple. At any of the four Londe Jewellers Gold & Diamonds showrooms, Sitabuldi, Gokulpeth, Manish Nagar and Nandanvan, all open 11 AM to 8:30 PM, we ask for PAN when the invoice actually crosses Rs 2,00,000 and not before. If your bridal purchase lands at Rs 1,85,000 you will not be asked for it. If it lands at Rs 2,40,000 you will, and you will be told before the bill is raised rather than after you have paid, which is the sequence that generates most of the arguments we hear about from other shops.
Just under Rs 2,00,000 in a single transaction, because section 269ST bars the receipt of two lakh rupees or more in cash. The section is short enough to read in full, and reading it in full is the fastest cure for the folklore around it:
"No person shall receive an amount of two lakh rupees or more, (a) in aggregate from a person in a day; or (b) in respect of a single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account."
Three things follow from that text. First, the phrase is two lakh rupees or more, not exceeding two lakh rupees. Exactly Rs 2,00,000 in cash is already a contravention, which is the opposite of how the PAN threshold works and is a distinction almost every summary online gets wrong. Second, the restriction is on receiving, not on spending, and that changes who carries the risk. Third, there is no gold in the section at all. It applies to every kind of receipt in India, and jewellery is simply one of the places people notice it.
Section 269ST was inserted by the Finance Act 2017 and took effect on 1 April 2017. In practice the limit almost never blocks a purchase, because Londe Jewellers Gold & Diamonds accepts UPI, debit card, credit card, cheque and bank transfer at every Nagpur showroom, and the gold rate we bill you at is identical whichever of them you use.
If a cash payment breaks section 269ST, the shop pays the penalty, and the penalty is the entire amount received. This is the part of the law that argues against our own trade interest, so it is worth stating plainly rather than burying. Section 271DA reads that if a person receives any sum in contravention of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt, with an escape only where that person proves there were good and sufficient reasons for the contravention. The penalty is imposed by the Joint Commissioner.
Apply that to a counter. A jeweller who accepts Rs 3,00,000 in cash from a customer can be penalised Rs 3,00,000, on top of losing nothing at all from the customer's side, because the buyer is not the person receiving. The Central Board of Direct Taxes said the same thing in Circular No. 22 of 2017, describing 271DA as the penal provision introduced alongside the new section.
So when a Nagpur shop tells you it cannot take two lakh in cash, it is not being difficult, and it is not passing a burden to you. It is the only party in the room with money at stake. Londe Jewellers Gold & Diamonds declines cash at or above Rs 2,00,000 on any single bill at Sitabuldi, Gokulpeth, Manish Nagar and Nandanvan. A shop that agrees to take it is telling you something about how it keeps its books, and by extension about what your invoice will be worth if you ever need it.
There is no Rs 50,000 PAN threshold for jewellery, and there are two separate reasons that number is stuck in circulation.
The first is Rule 114B itself. The rule does carry several Rs 50,000 lines, and they are real: cash payment of a hotel or restaurant bill exceeding Rs 50,000 at any one time, cash purchase of bank drafts, pay orders or banker's cheques exceeding Rs 50,000 in a day, cash deposit into a bank exceeding Rs 50,000 in a day, cash paid for foreign travel or foreign currency exceeding Rs 50,000 at any one time, life insurance premium exceeding Rs 50,000 in a year, and payments exceeding Rs 50,000 for mutual fund units, debentures or Reserve Bank of India bonds. Six thresholds at Rs 50,000, none of them jewellery. Once a number appears that often in one table, it attaches itself to whatever the reader came looking for.
The second reason is a genuine six week episode. A notification dated 23 August 2017 brought dealers in precious metals and stones above a turnover threshold under the money laundering framework, which carried customer identification duties and produced a wave of coverage about Rs 50,000 jewellery purchases needing identity documents. The Government withdrew that notification on 6 October 2017 after representations from the sector. It was in force for about six weeks in 2017. Articles written during those six weeks are still ranking, and still being copied.
At Londe Jewellers Gold & Diamonds we do not ask for PAN on a Rs 50,000 gold purchase in Nagpur, because nothing requires it. If a jeweller asks you for it at that level, the honest answer is usually internal policy rather than law, and you are entitled to ask which it is.
Jewellery used to have its own PAN threshold at Rs 5 lakh, and it was deleted with effect from 1 January 2016. This is the other stale number, and unlike the Rs 50,000 story it was correct once, which is exactly what makes it durable.
The change is documented in a Ministry of Finance press release dated 15 December 2015, which announced the new PAN thresholds and attached a chart comparing the existing requirement against the new one, line by line. Against purchase of jewellery or bullion, the existing requirement is listed as payment of Rs 5 lakh or more at any one time or against a bill, and the new requirement reads, in the Government's own words, deleted and merged with next item in this table. The next item is purchases or sales of goods or services, whose existing requirement was none at all and whose new requirement became purchase or sale of any goods or services exceeding Rs 2 lakh per transaction. The changes took effect on 1 January 2016.
So jewellery did not merely get a lower number. It stopped being a named category and became ordinary goods. That is why the current rule does not mention gold, and why any page that answers the question by talking about a special jewellery limit is working from a rule that was replaced more than ten years ago.
| Date | What changed |
|---|---|
| Until 31 December 2015 | PAN quoted on jewellery or bullion of Rs 5 lakh or more, its own entry in Rule 114B |
| 1 January 2016 | Jewellery entry deleted and merged into a general goods and services entry at above Rs 2 lakh per transaction, any payment mode |
| 1 April 2017 | Section 269ST and the penalty in section 271DA come into force. Subsections (1D) and (1E) of section 206C, which had required tax collection at source on certain cash sales, are omitted on the same date |
| 23 August to 6 October 2017 | Money laundering notification covering dealers in precious metals is issued, then withdrawn |
| Today | PAN above Rs 2 lakh, no cash receipt of Rs 2 lakh or more. No jewellery specific threshold exists |
The 1 April 2017 row is worth a second look, because the two halves are connected. The tax collection mechanism on cash sales was removed at the exact moment the cash receipt restriction arrived. One replaced the other. If a shop still adds a tax collected at source line to a routine gold bill, ask which provision it is charging under, and run the rest of the invoice through our gold bill verification checklist.
Splitting a large purchase into several smaller cash payments does not work, because section 269ST aggregates three different ways. This is the single most common misunderstanding we meet across the counter during Nagpur wedding season, and it costs the shop, not the customer, which is why we would rather explain it in advance.
Clause (a) aggregates everything received from one person in a single day, so paying three times at one counter on one afternoon is one receipt. Clause (b) covers a single transaction however it is paid, so instalments across weeks against one bridal set are still one transaction. Clause (c) aggregates transactions relating to one event or occasion, and this is the clause written for weddings: separate bills, on separate days, for the mangalsutra, the bangles and the necklace, all for the same wedding, can be read as one occasion.
Clause (c) is also the genuinely contested part of the section, and we would rather say so than pretend otherwise. What counts as one occasion is not defined in the Act, and the Board has had to clarify it in specific commercial settings. In Circular No. 25 of 2022 it held that for cooperative societies a dealership or distributorship contract does not by itself constitute an event or occasion, so receipts under it need not be aggregated across the year. That clarification was written for milk societies, not for jewellers, and it does not answer the wedding question.
The practical test we use, and the one we would suggest to any buyer: if the purchases would be described to a relative as being for the same wedding, assume they are one occasion and stay clear of cash entirely. The cost of being wrong sits with the shop, and the cost of being right is one UPI transfer. At Londe Jewellers Gold & Diamonds we bill wedding purchases against a single order number so the record is coherent on both sides, and we plan the payment mode with the family at the first visit rather than at the till on the last one. If you are budgeting a full set, our Vidarbha wedding jewellery budget guide works through the same purchase from the other end.
Londe Jewellers Gold & Diamonds settles old gold payouts, refunds and returns by bank transfer or UPI only, never in cash, at all four Nagpur showrooms. It is a policy customers occasionally push back on, so here is the whole reasoning rather than a slogan.
There is a statutory half. Section 40A(3) of the Income tax Act disallows business expenditure where a payment, or the total of payments, made to one person in a day otherwise than by account payee cheque, account payee bank draft or electronic transfer exceeds Rs 10,000. That figure was cut from Rs 20,000 by the Finance Act 2017 with effect from 1 April 2018. Buying your old gold is expenditure for us. A jeweller who hands over a large cash payout is buying stock it cannot claim, which is a strong hint about what else is not being recorded.
There is a practical half that matters more to you. A bank credit is dated, named and permanent. It establishes what you were paid and when, which is the record you will want if the source of your funds is ever queried, or if you are reconciling a valuation years later. A bundle of notes establishes nothing. We would rather hand you a slower payment and a permanent record than the reverse.
The same discipline runs through the exchange itself. We accept 22K and 24K gold at the prevailing IBJA rate with zero deduction, including pieces bought from any other jeweller in India, and the old gold weight and valuation are printed on the new invoice. The policy is set out in full on our gold exchange in Nagpur page.
For a purchase above Rs 2,00,000, carry your PAN card or the number, and plan a bank payment mode. Below that figure you need nothing beyond the way you intend to pay. A short checklist for a Nagpur buyer:
Everything else is the jeweller's job. You should leave with an itemised invoice showing gram weight and karat, per gram rate, making charge, GST as a flat 3 percent of the total, and the HUID of every hallmarked piece. If it is missing any of those, the tax thresholds are the least of the problems on that bill.
If you are planning a large purchase and are unsure which threshold you will cross, the fastest way to settle it is at a counter with the numbers in front of you. Bring the piece you are considering, or the bill you have already been given, to our Sitabuldi store and we will work through the arithmetic with you before anything is billed. No charge and no purchase required.
The same conversation is available at our Gokulpeth showroom on N Bazar Road, our Manish Nagar showroom on Beltarodi Road near Shanti Park, and our Nandanvan showroom on Tiranga Square Road opposite Axis Bank, all open 11 AM to 8:30 PM. Londe Jewellers Gold & Diamonds has sold BIS hallmarked gold and natural certified diamonds in Nagpur since 1989, across 37 years and more than 5 lakh families.
This page is general information, not tax advice. Thresholds and rules change through amendments, notifications and circulars, and individual circumstances vary. Confirm your own position with a chartered accountant before acting on any figure here.
