India Removes Value Caps Under Customs Baggage Rules, 2026 Gold Jewellery 40 Grams Allowance

(INDIA) — India’s Customs Baggage Rules, 2026 changed how gold jewellery is treated at the border, starting February 2, 2026, by removing old rupee value caps and switching to a simple weight-only duty-free allowance.

Finance Minister Nirmala Sitharaman announced the new framework on February 1, 2026. The headline change is straightforward: eligible travelers can bring a fixed weight of gold jewellery duty-free even if market prices spike.

For many UAE- and Dubai-based Indian-origin families, this closes a long-running compliance gap created by rising gold prices. This is not a U.S. tax law change, but it can affect U.S.-based taxpayers in tax year 2026 (returns filed in 2027) if you buy gold in Dubai, carry it into India, and later sell it or move it to the U.S.

Those steps can create U.S. reporting and capital gain questions.

📅 Deadline Alert: The India rule took effect February 2, 2026. Travel after that date should follow the new weight-based allowance and declaration practice.

Overview of the Customs Baggage Rules, 2026

Under the Customs Baggage Rules, 2026, India removed the old maximum value limits on gold jewellery for certain travelers. Instead, it set a duty-free weight allowance that applies regardless of the gold’s market value.

The new duty-free jewellery allowance is:

• 40 grams for female travelers
• 20 grams for male travelers

The change matters because gold prices have moved sharply over the last decade. A rupee cap that once fit normal purchases later became too low for common jewelry items, triggering unexpected duty exposure at the airport.

Key changes under the 2026 rules (why the old system broke)

Before February 2, 2026, travelers had to track both weight rules and value caps:

• ₹100,000 value cap for women
• ₹50,000 value cap for men

That old framework was last updated in 2016, when gold was about ₹2,500 per gram. By February 2, 2026, the MCX gold price reached about ₹1,43,926 per 10 grams, a 393.93% increase over a decade.

The practical result was harsh. Even 10 grams could come close to, or exceed, the old ₹100,000 cap during high-price periods. That forced travelers into disputes, appraisals, or unexpected duty payments.

Before/After comparison (India customs rule change)

Who qualifies for the duty-free jewellery allowance

The duty-free allowance is not automatic for every visitor. Under the 2026 rules, it applies to:

• Returning residents of India, or tourists of Indian origin
• Travelers who have been abroad for more than one year
• Jewellery carried in bona fide baggage

“Bona fide baggage” generally means personal baggage accompanying the traveler, consistent with personal use. It is not meant for commercial quantities.

This eligibility point matters for UAE-based expatriates. A short trip from Dubai to India may not qualify if the “abroad for more than one year” condition is not met.

What counts as “jewellery” under the new rules

The 2026 rules define jewellery broadly as articles of adornment ordinarily worn by a person, made of gold, silver, platinum, or other precious metals, and studded or not studded.

That means items like chains, bangles, rings, and certain studded pieces can fall under the definition. The key is that the item is an adornment ordinarily worn, not a raw metal bar.

Financial implications and benchmark figures (Dubai to India reality check)

Because the rupee value caps are removed, many travelers now think in grams again. Using February 4, 2026 Dubai gold rates as a benchmark, the duty-free allowance was estimated at roughly:

• 40 grams (women): about Dh3,400
• 20 grams (men): about Dh1,700

Those are approximations and will change with daily rates and making charges. But the point is stability: under the 2026 rule, a surge in gold prices does not, by itself, wipe out the duty-free treatment for eligible travelers.

U.S. tax angle for UAE- and U.S.-connected families (tax year 2026)

Many readers in Dubai later move to the U.S. on H-1B, L-1, or as green card holders. If you become a U.S. tax resident under the Green Card Test or Substantial Presence Test, you generally report worldwide income.

The core U.S. residency rules are in IRS Publication 519 at irs.gov/pub/irs-pdf/p519.pdf.

Here is where the India customs change can intersect with U.S. reporting:

• If you later sell the jewellery, you may have a U.S. capital gain to report for the year of sale.
• Your U.S. tax basis usually starts with what you paid, plus certain acquisition costs. Keep invoices.
• If you pay foreign taxes tied to a later sale, you may be eligible for relief. Review IRS guidance for international taxpayers at irs.gov/individuals/international-taxpayers.

Also remember: gold jewellery itself is not a “financial account.” It does not trigger FBAR by itself. But if you used overseas accounts to buy gold, those accounts can still have reporting duties.

Effective date and transition treatment

The new Customs Baggage Rules took effect on February 2, 2026. In practice, travel on or after February 2, 2026 should be assessed under the new framework.

Trips before that date generally fall under the prior rule set, including value caps. If you were stopped under the old rules before February 2, 2026, keep copies of any customs paperwork.

That documentation can matter later for proof of lawful import and cost tracking. India did not announce a special “grandfather” relief for past noncompliance in the description above, so travelers should assume enforcement depends on the date of entry.

Implications for UAE-based Indian-origin expats

For UAE-based expats, this change affects real travel routines. Trip planning and baggage discipline are directly impacted.

• Trip planning: If you qualify, you can plan around 40 grams (women) or 20 grams (men), rather than guessing a rupee cap.
• Baggage discipline: Keep jewellery in bona fide baggage and avoid packing patterns that look commercial.
• Declaration choices: If you exceed the allowance, be ready to declare and pay the applicable duty. Do not rely on informal estimates.

For U.S.-connected families, treat customs compliance and tax records as connected. Keep purchase invoices from Dubai or elsewhere, weight descriptions and certificates if available, photos and personal inventory lists for high-value pieces, and any India customs declarations or payment receipts.

For U.S. forms and instructions that may later matter, use the IRS forms library at irs.gov/forms-pubs to confirm the right year’s reporting.

Recommended actions and timeline (travel + tax year 2026)

1. Before travel to India (from Dubai or elsewhere). Confirm you meet the “abroad for more than one year” condition and pack jewellery as bona fide baggage.
2. At entry to India. If you are over 40 grams (female) or 20 grams (male), prepare to declare. Keep receipts of any duty paid.
3. During tax year 2026 and beyond (U.S. perspective). If you become a U.S. tax resident, keep worldwide asset sale records. Use Publication 519 to confirm residency status.
4. When filing U.S. taxes for tax year 2026 (filed in 2027). Report any taxable income events that occurred in 2026. This includes jewellery sales, not mere possession.