Investment in Gold: Gold has special importance in Indian culture. Gold is considered to be the form of Goddess Lakshmi here. There is a tradition of buying gold on many festivals in India. Akshaya Tritiya and Dhanteras are prominent among these. There is not much time left for Dhanteras. This year Dhanteras will be celebrated on 29 October 2024. Buying gold on this day is considered auspicious. Gold can be invested in many ways. You can buy it as jewellery. Can buy gold coins. Can buy digital gold. You can subscribe to Sovereign Gold Bond. You can invest money in gold ETF or invest in gold saving schemes. There is also tax on investment in gold. The tax on both digital gold and physical gold is the same. But the tax rules are different in Sovereign Gold Bond. Let us know in detail.
physical gold
Both physical gold and digital gold are taxed in the same way. If it is sold after 3 years of purchase, it attracts long term capital gains tax at 20% + 8% cess. When it is sold within 3 years, the gains will be added to your income and taxed as per the slab.
Sovereign Gold Bond (SGB)
Tax rules are different for sovereign gold bonds. If you sell them in the secondary market within 3 years of purchasing them, they will be taxed as per your slab rate. But if you sell them after holding them for three years, then they attract long term capital gains tax of 20 per cent after indexation. And if you keep them till maturity, there is no tax on them. The maturity period of these bonds is 8 years and after 5 years, the option of early redemption is also available. The 2.5 percent annual income earned on these bonds is taxed as per the slab.
Gold Exchange Traded Fund (ETF)
Earnings on ETFs are taxed as per the income tax slab. It doesn’t matter when you sell them.
