Gold Investment on Dhanteras: There is a tradition of buying gold on Dhanteras. This tradition has been going on for a long time. Although earlier people used to buy gold on Dhanteras only considering it auspicious, now the trend is changing. People now buy gold, but considering it as a safe investment option. For this reason, investment is no longer limited to physical gold only. Apart from physical gold, people are also investing money in digital gold, paper gold, gold bonds and gold ETFs. Anyway, gold is an investment option which can give you stable returns in the long run. If we look at its return history, it is a safe investment option.
Income tax rules on physical gold
Investing money in physical gold means buying jewellery, gold biscuits, gold coins. However, physical gold is the most popular option for investing in gold in India. Long term capital gains (LTCG) and short term capital gains (STCG) have to be paid on physical gold.
The returns received from gold held for 36 months or more are called long term capital gains. According to the Income Tax Act of India, you will have to pay 20 percent tax and 4 percent cess on Long Term Capital Gains (LTCG) while selling gold. In this way the tax on physical gold is 20.8 percent. The returns received from gold held for less than this period are called short term capital gains. In case of STCG, the tax is levied on the basis of your income tax slab.
Also read: Gold ETF: Change the way of investing in gold on Dhanteras, the shine of the portfolio will increase, you will get high returns.
Income tax on digital gold
You can buy digital gold online. There is no hassle of maintenance like physical gold. Digital gold remains in your digital wallet. You can also buy and sell it. If needed, digital gold can be converted into physical gold by paying some extra charge. Digital gold is taxed as per the income tax rules on physical gold. That means digital gold will be taxed at 20.8 percent just like physical gold. Government regulators like RBI or SEBI have no authority to regulate this investment option.
Income tax on paper gold
Paper gold includes gold mutual funds, ETFs, sovereign bonds etc. The income you earn by selling units of ETF or mutual fund is called your capital gain. According to the tax rules on gold in India, if you earn income by selling the unit after 36 months, then it is Long Term Capital Gain (LTCG) and 20.8 percent tax has to be paid on it. Whereas the returns received from paper gold kept for less than 3 years are called short term capital gains. In case of STCG, the tax is levied on the basis of your income tax slab.
Also read: Dhanteras 2024: This is the best time to buy gold and silver on Dhanteras, every detail including auspicious time, date, timing.
Income tax on gold received as gift
People gift gold to their friends or relatives on special occasions like Dhanteras or Diwali. If you are receiving gold as a gift or inheritance from family members or relatives, then you can get exemption from income tax on it. According to Section 56(2) of the Income Tax Act, there is no income tax on gifting gold jewelery to parents, spouse or children.
If you receive a gold gift worth more than Rs 50,000 from anyone other than relatives, then tax has to be paid. Such income is taxable because it is considered income from other sources. Apart from this, you can also get tax exemption on gold jewelery received at your wedding. But if you want to sell these gifts then the government will impose tax as per the rate of capital gains.
