How much income tax on selling gold?
Invest in gold: Gold is one of the most precious minerals in the world. Given the returns it makes, it is an excellent option for long-term investment. This can be calculated from the fact that in the last three years, the price of gold per 10 grams has increased by about 20 thousand rupees. In this era of the coronavirus, investment in gold has grown very fast.
Four ways to buy and invest in gold in India
1. Gold can be purchased in a physical form in the form of jewelry or coins from any shop But, quality, safety, and high cost remain a concern in buying gold jewelry.
2. Buy or Invest in gold mutual funds or ETFs. In this, gold can be bought and sold in the stock format in paper format. In this, gold can be bought and sold in the stock format in paper format.
3. You can also purchase digital gold from the e-payment platform.
4. The government has now given people the option of buying Sovereign Gold Bonds to buy physical gold.
When you sell gold, you have to pay income tax on it, but at what rate the tax rate will be charged from you, it depends on how you bought the gold
1.Tax on gold jewelry and coins
Most people buy gold in the form of gold jewelry and coins. The tax on selling it depends on how long you have held the gold jewelry. Some people invest in gold for the long term and some for a short time. If gold is kept for less than three years, it will attract short term capital gains tax. Short term capital gains are added to income, and the person has to pay income tax according to the tax slab.
At the same time, if the gold is kept with you for more than three years, then based on long-term capital gains, the tax will have to be paid while selling it. It has to pay a fee at the rate of 20%. Gold mutual funds or ETFs are the most economical way to buy gold. However, selling ETF units is taxed like physical gold
2. Tax on the digital gold
Investing in digital gold is a new way of buying gold. Many banks, including e-payment platforms such as Paytm, amazon, google pay, mobile wallet, and brokerage companies, have started selling digital gold through their app by agreeing with SafeGold. Sales of digital gold also have to pay income tax like physical gold and gold mutual funds or ETFs.
3.Tax on sovereign gold bond
To encourage people to buy and invest in gold bonds in exchange for buying physical gold (gold jewelry and coins), the central government has given people an option to buy sovereign gold bonds. Sovereign Gold Bonds issues RBI on the government’s instructions. Its maturity period is 8 years.
After the maturity of this bond, the government does not charge any tax on the profit. Apart from this, the government also pays 2.5% interest every year on Sovereign Gold Bonds. But this interest is taxed. At the same time, if you sell a gold bond before the maturity period, you have to pay income tax on it like physical gold.