Earlier, indexation for inflation was allowed while calculating long term capital gains on sale of gold and gold jewellery. Indexation allowed the seller to reduce the taxable capital gains by inflating the cost of acquisition as per notified cost inflation index. Earlier, if you have owned the gold for longer than three years, capital gains on its sale would be deemed long-term and subject to 20% tax. Now you will have to pay a flat 12.5% tax rate on long term capital gains on gold sold after a holding period of 24 months (36 months earlier).
Gold and silver to become cheaper, customs duty cut to 6%
The income tax slab rate will continue to be applicable to those who have short-term capital gains on gold.
The new rules for capital gains on gold come into effect from July 23, 2024 once the budget proposal are passed by the parliament.
As per the explanatory memorandum to the budget, “the short-term capital gains tax is now 20% on all financial assets, while the long-term capital gains tax was raised from 10% to 12.5% in the Union Budget for 2024–2025. Additionally, the Rs 1.25 lakh LTCG non-taxable ceiling has been raised from Rs 1 lakh.”
Prior to the budget 2024 announcements, the capital gains on physical and digital gold was calculated depending on the holding period. If the gold was sold before the completion of 36 months from the date of purchase, than capital gains are termed as short term capital gains or STCG. On the other hand, if the gold was sold after the period of 36 months which is termed as long term capital gains (LTCG) along with indexation benefit. The STCG is taxed at income tax slab rate applicable to your total income. The LTCG is taxed at 20% with indexation benefit.
The gold mutual funds are taxed at income tax slab rate applicable to your income. From April 1, 2023, the indexation benefit has been removed which is same as taxation of specified debt mutual funds.
rewrite this title Gold investment to attract LTCG tax of 12.5% instead of 20% with indexation, holding period cut to 24 months
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Earlier, indexation for inflation was allowed while calculating long term capital gains on sale of gold and gold jewellery. Indexation allowed the seller to reduce the taxable capital gains by inflating the cost of acquisition as per notified cost inflation index. Earlier, if you have owned the gold for longer than three years, capital gains on its sale would be deemed long-term and subject to 20% tax. Now you will have to pay a flat 12.5% tax rate on long term capital gains on gold sold after a holding period of 24 months (36 months earlier).
Gold and silver to become cheaper, customs duty cut to 6%
The income tax slab rate will continue to be applicable to those who have short-term capital gains on gold.
The new rules for capital gains on gold come into effect from July 23, 2024 once the budget proposal are passed by the parliament.
As per the explanatory memorandum to the budget, “the short-term capital gains tax is now 20% on all financial assets, while the long-term capital gains tax was raised from 10% to 12.5% in the Union Budget for 2024–2025. Additionally, the Rs 1.25 lakh LTCG non-taxable ceiling has been raised from Rs 1 lakh.”
Prior to the budget 2024 announcements, the capital gains on physical and digital gold was calculated depending on the holding period. If the gold was sold before the completion of 36 months from the date of purchase, than capital gains are termed as short term capital gains or STCG. On the other hand, if the gold was sold after the period of 36 months which is termed as long term capital gains (LTCG) along with indexation benefit. The STCG is taxed at income tax slab rate applicable to your total income. The LTCG is taxed at 20% with indexation benefit.
The gold mutual funds are taxed at income tax slab rate applicable to your income. From April 1, 2023, the indexation benefit has been removed which is same as taxation of specified debt mutual funds.
