Your gold is sitting idle. A step-by-step guide to how you can lease it and earn a tax-free income

Indian households hold an estimated 25,000 tonnes of gold, most of it locked away in lockers, earning absolutely nothing. Gold leasing changes that equation without forcing you to sell.

Points to remember
25,000 tonnes held by Indian households
₹0 return from gold sitting idle

Gold leasing lets you lend physical gold to banks, jewellers, or institutions for a fixed period. You remain the owner throughout. In return, you earn interest, typically paid in gold grams, not cash, meaning your gold holding actually grows over time.

Under India's Gold Monetisation Scheme (GMS), you can deposit gold at designated banks for a minimum of 1 year and earn tax-free interest, with your gold returned at maturity.

Gold leasing typically yields 2–7% per annum, paid in extra gold weight. Under the GMS, that interest is fully exempt from income tax, capital gains tax, and wealth tax. For anyone in the 30% tax bracket, the net return beats most fixed deposits hands down.

Points to remember
2–7%: annual yield (in gold grams)
0%: tax on GMS interest earned

1.Visit a designated bank (SBI, Bank of Baroda, or others) to check GMS rates and minimum deposit requirements.
2.Calculate the purity and weight of your gold — most schemes accept 995 purity bars or hallmarked jewellery above 30 grams.
3.Compare GMS interest (tax-free) against FD rates after 30% tax deduction — the math often favours gold leasing for high earners.

Leased gold is not protected by deposit insurance — unlike a standard savings account, there is no safety net if the jeweller or platform fails.

Counterparty risk is real. Always vet the leasing institution carefully before committing your gold.

Heirloom jewellery deposited into a GMS scheme is melted down. You will not get the original crafted pieces back at maturity, only gold of equivalent weight.

Need immediate liquidity to fund investments, buy property, or repay high-interest debt? Sell, leasing locks up your gold for a fixed term.

Uncomfortable with counterparty risk and the absence of credit insurance? Sell and move the proceeds into fixed deposits or Sovereign Gold Bonds instead

Gold leasing is a compelling passive income strategy for investors who want to sweat their idle gold without liquidating it. But counterparty risk is real, and heirloom jewellery is gone once melted. Weigh the trade-offs honestly before you decide.

This slideshow is for informational purposes only. Consult a financial adviser before making investment decisions.