Gold Investment Tax Rules in India: What Every Investor Must Know
Precious metals like gold have been a popular and important form of investment for investors for centuries and plays an important role in their portfolios.
Also, before investing in gold, it is very important to understand the tax rules related to it.
Let us tell you about some major tax rules applicable to gold investment in India.
Physical Gold Rules
Purchasing physical gold such as jewellery, gold coins or bars attracts a Goods and Services Tax (GST) of 3%.
If you sell physical gold before three years, the profit will be treated as short-term capital gain (STCG) and will be taxed as per your applicable income tax slab rate.
On the other hand, if you sell physical gold after three years, the profit will be treated as long-term capital gain (LTCG) and will be taxed at the rate of 20%, which also includes indexation benefits.
Rules Applicable to Digital Gold
There is no GST applicable on buying digital gold like Sovereign Gold Bonds (SGB) or Gold Exchange Traded Funds (ETF).
Let us tell you, in the case of SGB, the interest earned on maturity is tax-free. In the case of Gold ETF, the tax rules are the same as those of physical gold.
It is important for you to understand the tax rules of gold as it will help you make informed investment decisions. By doing so, you can minimise your tax liability and maximise your returns on your investments.
Disclaimer:
The information provided in this article is for general informational purposes only and should not be considered financial or tax advice. The tax laws and regulations are subject to change, and accuracy is not guaranteed.
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