Capital Gains Tax Summary

Asset Type Gold
Purchase Value ₹5,00,000
Sale Value ₹8,00,000
Holding Period 40 months (3 years 4 months)
Gain Type LTCG (Long-Term Capital Gain)
Total Capital Gain ₹3,00,000
Exempt Amount Nil
Taxable Gain ₹3,00,000
Tax Rate 12.5% + 4% cess
Capital Gains Tax (inc. cess) ₹39,000

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Frequently Asked Questions

Is gold LTCG calculated with indexation in India?

No, not anymore. Post Budget 2024, indexation benefit has been removed for gold. For physical gold, digital gold, and gold ETFs held over 24 months: LTCG is taxed at a flat 12.5% + 4% cess on the actual gain (without indexation). This is a change from the earlier regime of 20% with indexation after 36 months.

How is gold ETF vs physical gold taxed differently?

Gold ETFs and gold mutual funds are taxed exactly like physical gold: LTCG at 12.5% without indexation (if held 24+ months) or slab rate for STCG. Sovereign Gold Bonds (SGBs) issued by RBI are different - gains at maturity (8 years) are completely tax-free, making SGBs the most tax-efficient gold investment.

What is the threshold for LTCG on gold?

Post Budget 2024, gold requires 24 months of holding to qualify as LTCG (reduced from the earlier 36 months). Gold sold within 24 months is STCG, taxed at your income slab rate (up to 30%). The LTCG rate is 12.5% without indexation, which is simpler but means you cannot adjust for inflation.

Should I invest in physical gold or Sovereign Gold Bonds?

SGBs are generally superior: they earn 2.5% annual interest, capital gains at 8-year maturity are tax-free, and there's no storage/purity risk. Physical gold has full liquidity and cultural value. Gold ETFs sit in between - liquid, pure, but taxable. For long-term investment, SGBs win on tax efficiency.

How do I report gold sales in ITR?

Report in Schedule CG in ITR-2 or ITR-3. LTCG on gold goes under 'LTCG on assets other than listed equity'. You need purchase proof (jeweller invoice or demat statement for ETFs) and sale receipt. Since Budget 2024 removed indexation, you no longer need CII values - just the actual purchase and sale prices. Keep all sale receipts - jewellers now report cash sales above ₹2 lakh.

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