Published: 27th Aug 2024
By: Value Research
Short-term tax: If physical gold was sold within three years, the gains were added to the taxable income and taxed at the applicable income tax slab rates. Long-term tax: If sold after three years, a 20% tax was applicable on the gains, along with indexation benefit.
Short-term tax: Now, the gains are added to your taxable income if you sell physical gold in two years (it was three years earlier). Long-term tax: If sold after two years, a 12.5% tax will be payable on the gains. However, indexation benefits will no longer be applicable.
Although a shorter holding period might benefit some investors, removing the indexation benefit will lead to a higher tax liability now.
Let’s look at the other gold options: a) Gold mutual funds, b) Gold ETFs, and c) Sovereign Gold Bonds (SGBs). Of them, SGBs are the best option for long-term investors.
For long-term investors, Sovereign Gold Bonds (SGBs) held until maturity or sold to the Reserve Bank of India (RBI) remain the best option. The gains are 100% tax free.
To learn which option can be considered as a medium-term investment, we suggest you click below for the full story.