Investment in Gold: Akshaya Tritiya will be celebrated across the country on Friday, May 10. Buying gold on Akshaya Tritiya is considered auspicious. You can invest in gold in many ways. You can buy it in the form of jewelery or buy gold coins. You can also 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. Therefore, when you are going to invest in gold, then definitely know about the tax also. The tax on both digital gold and physical gold is the same. But the tax rules are different in Sovereign Gold Bond.
Tax on investment in physical gold (coins/biscuits)
Tax on physical gold is the same as on digital gold. 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.
Tax on Gold Exchange Traded Fund (ETF)
Earnings on ETFs are taxed as per the income tax slab. It doesn’t matter when you sell them. According to AMFI data, there are 17 gold ETF schemes with total AUM of Rs 28,529 crore as on February 29, 2024.
Tax on 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.
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