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Dhanteras 2023: How Much Gold Can You Buy in Cash?

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October 18, 2023


What’s Inside

Dhanteras — one of the many auspicious festivals we celebrate in India — marks the beginning of the Diwali festivities in the country. The ‘dhan’ in its name translates to wealth, underlining the festival’s significance in increasing prosperity. During Dhanteras, gold and other precious metals are also purchased in addition to the rituals that form a part of the day. 

If you are planning to purchase gold on Dhanteras this year, you need to be aware of the transaction limits in place. You also need to be mindful of the Dhanteras gold rates, which may be higher than average due to rising demand. 

Buying Gold on Dhanteras: Cash Transaction Limits Under the Income Tax Act, 1961

While there are no specific cash transaction limits on buying gold exclusively, there are general restrictions that apply to gold purchases as well. As per the Income Tax Act, 1961, cash transactions above a specified limit are not permitted. Section 269ST of the Act specifically prohibits any cash transactions exceeding ₹2 lakhs. 

Any person who receives cash above the threshold specified u/s 269ST will be penalised as per section 271DA of the Act. The penalty for cash transactions that exceed ₹2 lakhs is an amount equal to the sum received during the sale. 

For example, say you buy ₹2,70,000 worth of gold on Dhanteras in cash. Since this transaction exceeds the threshold of ₹2 lakhs, the seller will be penalised u/s 271DA of the Income Tax Act, 1961. The amount of penalty will be the same as the transaction amount, i.e. ₹2,70,000. 

Requirement of PAN/Aadhaar for Buying Gold

Aside from the limits imposed on gold purchases made in cash, you also need to be aware of the KYC norms in place. Depending on the transaction value, you may have to provide your PAN or Aadhaar. This applies to purchases made in case or via electronic fund transfers. The threshold limits for furnishing PAN/Aadhaar details are as follows:

A. For Transactions up to ₹50,000

According to the Prevention of Money Laundering Act, 2002, buyers need not furnish any KYC details for purchasing gold up to ₹50,000. 

B. Transactions from ₹50,000 to ₹2 lakhs

For purchasing gold worth over ₹50,000 but less than ₹2 lakhs, an identity proof like your Aadhaar will be required. 

C. Transactions exceeding ₹2 lakhs

Under Rule 114B of the Income Tax Rules, 1962, it is mandatory to submit your PAN if you are buying gold worth over ₹2 lakhs — irrespective of the mode of payment. 

Summing Up

The bottom line is that paying for gold in cash comes with certain clauses and restrictions. So, in addition to checking out the Dhanteras gold rates this year, you also need to be aware of these limits if you want to buy gold in cash. The best option would be to purchase gold on this auspicious day via other payment modes. 

This Dhanteras, Diversify Your Investments

This Dhanteras, gold need not be the only asset you purchase. You can also commit to your long-term goal of wealth creation by diversifying your portfolio across different investments. Users can find several investment options on the Fi app. Be it short-term or long-term — it's easy to invest with a simple swipe of your phone's screen. 

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Frequently Asked Questions

1. Is there a limit to how much gold I can purchase in cash on Dhanteras 2023?

Yes, most jewellers do not accept cash exceeding ₹2 lakhs for the sale of gold. This is true during Dhanteras as well. 

2. How is the cash limit for purchasing gold on Dhanteras determined?

The cash limit for purchasing gold on Dhanteras is primarily determined by the provisions of the Income Tax Act, 1961 and the Prevention of Money Laundering Act, 2002. 

3. Can I pay for gold with a combination of cash and other payment methods on Dhanteras?

Yes, you can pay for your gold purchase on Dhanteras using cash and other payment methods. However, you must ensure that you are mindful of the cash limits for buying gold.

4. What happens if I exceed the cash limit when buying gold on Dhanteras?

The cash limit on gold transactions applies to the seller (and not the buyer). If the seller accepts cash exceeding ₹2 lakhs for the sale of gold, they will have to pay a penalty equal to the transaction amount that violated the permissible limit. 

5. Are there any exceptions to the cash limit for gold purchases on Dhanteras?

No, there are no special exceptions or exemptions for purchasing gold on Dhanteras. The same limits apply, irrespective of when you purchase the precious metal. 

6. Can I pre-arrange purchases of gold on Dhanteras to ensure compliance with cash limits?

Yes, that depends entirely only whether or not the jewellers and sellers you choose offer the option to pre-arrange your purchases. 

7. Are there any penalties for jewellers or sellers who do not adhere to cash limits for gold purchases?

Yes, such jewellers and sellers who do not adhere to the cash limits for selling gold will be penalised under section 271DA of the Income Tax Act, 1961. 

8. How can I find out the specific cash limit for gold purchases in my area on Dhanteras?

The limit on cash transactions as per the Income Tax Act, 1961, is ₹2 lakhs. If there are any other specific cash limits set by jewellers or gold sellers in your area, you can directly verify them in person.


Investment and securities are subject to market risks. Please read all the related documents carefully before investing. The contents of this article are for informational purposes only, and not to be taken as a recommendation to buy or sell securities, mutual funds, or any other financial products.
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