Gold And Income Tax
When you purchase gold as a part of your savings for the year, you will be charged Goods and Service Tax (GST). Much of the gold in India comes to us by import. Due to this, the price of gold in the domestic gold market is closely connected to the fall and rise of the international gold price. Gold jewellery tax is calculated in whatever form gold is purchased. Even digital gold you are buying by remitting a small amount of money every month is also taxed. The profit you can gain by selling your gold will also be taxed based on the existing income tax laws. Whatever form of gold is purchased, you will be charged 3% GST charges on the value of gold and its making costs.
Paying Tax On Gold
Till now, gold is considered as an investment in India. Irrespective of your background or income, purchasing gold in real or digital or in bonds is always treated as a better option to save your hard-earned money. Apart from gold jewellery tax, income tax on selling gold is calculated if it is long term or short term. If the purchased gold is sold before three years comes under short-term, and it comes under long-term if it is exchanged for money after completing three years. The short-term capital profit received by selling gold will be added to the gross income and taxed according to the income slab you fall in. The long-term gain derived from the sale of gold is taxed at 20.8%.
Explore More About : Need For Reduction In Gold Jewellery Tax
Purchasing Gold Bonds
A sovereign gold bond is issued, on behalf of the Government of India, by the Reserve Bank of India. The gold bonds are alternate to having gold in real at home. You are allowed to invest in the gold bonds and on maturity, the amount is paid in cash. The gold bonds mature after eight years, and you can discontinue after completion of five years. The sovereign gold bond can be traded, within fifteen days of purchase, on the stock exchange. This option provides an opportunity for investors to close early to meet some emergency needs. The redemption of gold bonds is exempted from gold jewellery tax. A gold bond will pay an interest of 2.50% every year on the investment. The interest gained will be paid into your bank account every six months. The interest received on gold bonds attracts taxes under provisions of the Income Tax Act.