The gold market is going through a lot of ups and downs these days. The price of gold had reached around Rs 1 lakh 93 thousand. Now it has come close to Rs 1 lakh 55 thousand per 10 grams. In such a situation, if you are thinking of selling or buying gold, then this news is for you only. Let us know how much tax is levied on buying and selling physical gold, ETFs and sovereign gold bonds?
Physical gold, jewellery, digital gold, you will have to pay 3% Goods and Services Tax (GST) on all these options, whereas if you buy gold jewellery, then 5% GST is levied on the making charges. Apart from this, no GST is applicable on purchase of gold exchange-traded funds (ETF), gold mutual funds, sovereign gold bonds. At the same time, 6% custom duty is levied on importing gold from abroad. If you have received gold jewelery or gold in any other form through a will, then there is no inheritance tax on it.
Apart from this, there is no tax on gold received as a gift from some close relatives, but if the gold is gifted from a person who is not a close relative and its value is more than Rs 50,000 in a year, then it is taxable under ‘other income’.
tax on sale of gold
After July 23, 2024, the period for calculating short-term and long-term capital gains on gold, i.e. profit from selling after a short or long period, has changed. Also, under Section 54F of the Income Tax Act, long-term capital gain (LTCG) tax is not payable on the sale of gold, if the entire sale proceeds are invested in buying a house within the stipulated time.
Physical gold, jewellery, digital gold- If gold is held for more than 24 months, long-term capital gains will be taxed at 12.5% without indexation. If you sell in less than 24 months, the short-term capital gain will be added to your total income and taxed as per your tax slab.
Gold ETF- If the ETF is held for more than 12 months, long-term capital gains will be taxed at 12.5% without indexation. If sold before 12 months, the profit will be added to your income and taxed as per the slab.
Gold Mutual Fund- At the same time, if the mutual fund is sold after holding it for more than 24 months, it will be considered as long-term capital gain and will be taxed at 12.5%. If sold before 24 months, short-term capital gains will be taxed as per your income tax slab.
Sovereign Gold Bond- Before Budget 2026, sovereign gold bonds redeemed with the Reserve Bank of India on or before maturity were not taxable, whether purchased through primary issue or secondary market. Now only those bonds are exempt from tax which are purchased directly from the government and are held continuously till maturity. If purchased from the secondary market or sold in the middle, short-term or long-term capital gains tax will have to be paid depending on the holding period.
Inherited gold- There is no inheritance tax in India, but when you sell that gold, you will have to pay capital gains tax. The purchase price and period of retention will be considered to be the same as when the original owner purchased it. If the total holding period is more than 24 months, long-term capital gains tax will be charged at 12.5% without indexation. If less than 24 months, short-term gains will be taxed as per your income.