Your Family’s Jewellery and Art — Capital Assets That Need Certificates
Many Indian families are surprised to learn that the gold jewellery passed down over generations and the art hanging in their homes are capital assets under the Income Tax Act.
Unlike your car or your furniture, works of art, jewellery, and precious stones are specifically excluded from the personal effects exemption under Section 2(14)(ii). This means their sale — at auction, to a jeweller, or to another collector — triggers capital gain tax.
The Government Approved Capital Gain Valuer’s certificate is required for both the value at which the asset is sold and, where applicable, its FMV as on 1 April 2001 under Section 55(2)(b).
Valuation
Valuation
FMV Assessment
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Family Gold Jewellery
Gold jewellery is the single largest category of capital asset outside real estate held by Indian families.
A 100-gram gold necklace purchased in 1985 at approximately ₹3,000 per gram (₹3 lakh) is now worth approximately ₹95,000–98,000 per gram (as at mid-2025) — a current value of approximately ₹95–98 lakh.
The Section 55(2)(b) substitution changes the cost basis to the April 2001 IBJA price (approximately ₹4,500 per gram in April 2001 = ₹4.5 lakh).
For pre-2001 jewellery, establishing the defensible 1 April 2001 IBJA base value becomes an important part of the capital-gain computation.
For detailed gold and jewellery valuation requirements, refer to Gold Valuation & Government Approved Gold Valuer .
PAG and Art Collections
For collectors of PAG modernists and contemporary Indian art, the capital gain situation can be commercially significant.
A Husain canvas acquired in 1991 for ₹1.5 lakh has a current market value that may be multiple crore; the Section 55(2)(b) substitution to the 2001 PAG market value — already substantially above the 1991 price — produces a much higher cost base.
Husain canvas acquired for approximately ₹1.5 lakh.
The 1 April 2001 FMV can replace the earlier acquisition cost where applicable.
The Christie’s 19 March 2025 Husain sale at ₹119 crore establishes the top end of the PAG market.
Other works can command values ranging from several lakh to tens of crore, depending on artist, provenance, period, medium, condition, attribution and market evidence.
The Finance Act 2024 transitional computation determines whether Method A or Method B minimises the tax for the relevant acquisition and disposal circumstances.
Each qualifying transaction requires a Government Approved Valuer’s Rule 11UA(1)(a) certificate both at the disposal date and, for pre-2001 works, at 1 April 2001.
Explore specialist art valuation support through Government Approved Art Valuers .