Gold Tax: Is there tax on the income earned from gold also? Click to know!

Gold prices are increasing to such a level that it is becoming beyond the reach of the common man. Currently, gold prices in India have crossed ₹70,000 per 10 grams. People who already own gold or have invested in it have seen its value rise rapidly. Meanwhile, potential buyers are feeling the pinch. Today, we are not discussing the price of gold but are saying that if you are going to invest in gold, then you must know about the tax imposed on it.

Different investment avenues for gold

Many individuals invest in physical gold or gold bonds. Physical gold is often stored in our homes in the form of jewellery. Some people buy gold coins or jewellery, keep them in the locker and sell them when the prices rise. Others invest in gold mutual funds. Similarly, there are gold bonds that offer virtual gold. Now, let us know about the tax imposed on gold while selling it.

pc: Business Recorder

How much tax is applicable?

For your information, let us tell you that there is a tax on selling gold. Failure to do so may result in a legal notice being sent against you. If you sell gold within three years of purchase, it falls under short-term capital gains, which are taxed as per the applicable slab rate. On the other hand, selling after three years is considered long-term capital gains, with tax implications of up to 20.8%. The same rule applies to gold mutual funds also.

On the other hand, gold bonds have a maturity period of 8 years. If you redeem them after 8 years, there is no tax liability; They are completely tax-exempt. However, if you redeem these before 8 years, you may have to pay tax.

pc: MEC Mining

Tax only on profits

If you’re wondering why your own gold is being taxed, let’s clarify. If you bought gold for ₹5 lahks, and later its price becomes ₹8 lahks, you will not be taxed on the entire ₹8 lahks, but on the profit, which is ₹3 lakh.