Gold import taxes are levied as a tool to react to and prepare for economic situations, and have a major bearing on the price of gold in India. Higher import duties affect gold investment returns and savings, while also making events like weddings and festivals that much more expensive. This blog explains the concept of import taxes on gold in India, highlighting its impact. Keep reading to know more!
What is the Current Gold Import Tax in India?
As of August 2025, the effective gold import duty in India is 6%. This is a combination of the Basic Customs Duty (BCD) on gold imports in India, which stands at 5%, and the Agriculture Infrastructure and Development Cess (AIDC) of 1%.
It’s important to remember that these rates are subject to periodic changes as per the Union Budget and government notifications. So, keeping a track of official releases from institutions such as the Central Board of Indirect Taxes and Customs (CBIC) is important. Let’s take a closer look at what the gold import duty is and what its components are.
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What is the Gold Import Duty?
Gold import duty is a type of taxation levied by the Indian government on gold imported into the country from abroad. This policy is designed to regulate gold imports into the country, manage inflation pressures, and preserve foreign reserves.
It comprises certain components as mentioned above:
- Basic Customs Duty (BCD) - A tax levied across all imported goods as a percentage of their assessable value.
- Agriculture Infrastructure Development Cess (AIDC) - A special-purpose tax introduced in the 2021-22 budget to raise funds that aid the development of India’s agriculture infrastructure.
- Social Welfare Surcharge (only applicable in some cases): An additional taxation applied at 10% of the customs duty amount.
How is the Gold Import Duty Calculated?
When gold comes into India, customs officers first fix the assessable value according to international market rates. The aggregate import duty is then levied as a certain percentage on this value.
For instance, if ₹1,00,000 worth of gold is imported:
Basic Customs Duty: 5% of ₹1,00,000 = ₹5,000
Agriculture Infrastructure and Development Cess: 1% = ₹1,000
Total Import Duty: ₹5,000 + ₹1,000 = ₹6,000
It’s important to recognise that these duties are charged regardless of who imports the gold—individual travellers or licensed dealers. That being said, there are distinctions between the gold import duty amount for commercial purposes and personal imports by travellers.
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Different Custom Tax Charges on Types of Gold
Commercial rates have the fixed customs duty rate (currently 6%) while personal imports have a weight-based variable rate. In addition, customs duty only applies when the gold imported is above the duty-free limit.
Here’s a glance of the same:
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Here’s a breakdown of customs duty on gold above the duty-free limit, based on who has imported it:
For male passengers (Beyond 20g, capped at a ₹50,000 limit)
- 3% - 20 grams to 50 grams
- 6% - 50 grams to 100 grams
- 10% - over 100 grams
For Female Passengers (Beyond 40g, capped at a ₹1,00,000 limit)
- 3% - 40 grams to 100 grams
- 6% - 100 grams to 200 grams
- 10% - over 200 grams
Outlook of Gold Import Duty: 2025
India has retained the effective gold import duty at 6%, a rate first set in July 2024 and described by market analysts as the lowest in over a decade. Prior to this, the rate was set at 15%. The decision, confirmed in the Union Budget presented on 1 February 2025, was influenced by the positive outcomes of the earlier duty cut that had boosted official bullion imports and reduced the incentive for smuggling.
Alongside keeping the main import duty unchanged, the government has also lowered the customs duty on imported jewellery from 25% to 20%. This move aims to make jewellery imports more competitive, encourage formal trade channels, and support domestic jewellery businesses in sourcing materials at lower costs.
Lastly, as per the recent news of Aug 7, 2025, there’s been an additional 25% tariff imposed by the US on Indian imports. This development increases the likelihood of India raising its gold import duty in response to mitigate adverse economic impacts.
How Does Gold Import Duty Affect the Gold Value in India?
Import duty forms the major element in the final pricing of gold in Indian markets. There is a direct link between the two; if the duty rises, the price increases for consumers and jewellers. If it falls, the price drops marginally. Here’s a glance:
Domestic Gold Price
Globally, gold is traded in US dollars, but in India, the price is recalculated based on import duty, additional cess, and GST rates. So, even if the global gold rates remain constant, any increase/decrease in import duty is instantly reflected in the retail prices of gold in Indian jewellery stores.
Business and Industry
With a higher import duty, the domestic jewellery industry spends more on raw materials. These added costs are passed on to jewellery prices. It may affect Indian jewellery's competitiveness in foreign trade.
Gold Loans
Loan amounts granted against gold (jewellery or coins) depend on the prevailing market price in India, which already factors in import duties. Since lenders typically offer loans at 70-80% of gold’s market value (the loan-to-value ratio), a rise in duty can mean higher eligibility for loans for the same weight of gold; sudden drops, too, can affect the LTV ratio and repayment of existing gold loans.
Savings and Investments
For individuals, gold becomes costlier with higher duties. This sometimes shifts investor focus towards other asset classes, though gold’s cultural significance mostly keeps demand resilient.
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To Conclude
Import duty shapes the price, accessibility, and market flow of gold in India. Every individual or business looking to buy, sell, import, or seek a loan against gold should stay updated with policy announcements to make informed financial choices and to plan investments or business strategies more effectively.
Frequently Asked Questions
What is the impact of the gold import duty on gold loans?
Since gold in the country is priced inclusive of import duty, the higher the duty, the higher the price per gram. This impacts the loan-to-value ratio and eligibility in gold financing.
How much gold can individuals legally bring into India duty-free?
Indian citizens returning after at least a year abroad can bring up to 20 grams for men or 40 grams for women duty-free. Anything above this is taxed at the standard rates.
What happens if someone brings undeclared or excess gold into India?
If the imported gold exceeds the prescribed limits or is not declared, the customs authorities shall confiscate the gold and impose a fine on the importer, or in lieu of a fine, may impose a heavier penalty along with the confiscation.
Does the import duty structure change frequently?
Import duties are capable of being amended, usually during the annual budgets, according to changes in the economy or via government notifications from time to time. Hence, one is advised to keep track of such notifications from time to time.
Who is responsible for paying gold import duties?
The importer, whether an individual, jeweller, or firm, is responsible for payment at the time gold enters Indian territory.
Is GST applicable to gold after paying import duty?
Yes, once the goods are imported, any further sale within India is liable for 3% GST, which is then charged by dealers in the final retail price.
Where can I check the latest official gold import duty rates?
Check the Central Board of Indirect Taxes and Customs or the Ministry of Finance website for current and newly announced changes to duty structures.
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