Gold jewelry received as a gift, gold ETF, gold mutual fund.

There are several avenues through that one can invest in gold. the main mediums are jewellery, gold coins, gold ETF, sovereign gold bonds (SGB), and gold deposit certificates (GDC). The profits on these merchandise are taxed differently. For the needs of taxation, we will divide the products into 2 classes. within the initial categories are gold products like jewellery, gold coins and gold ETF and therefore the alternative class includes of SGB and GDC . allow us to examine the tax implications of each the categories of gold products.

The investments in gold products of the first category are treated as capital asset under the income tax laws so any gains realised over its acquisition cost is taxed under the head “Capital Gains". However, those who deal in gold as jeweller or bullion traders, the same gets taxed as business profits in respect of their investments in gold/jewellery for business purposes. However, the gold jewellery and gold coins held by these persons as personal investments are treated as capital assets only like other taxpayers.

The charge at which your earnings on gold merchandise receives taxed relies upon at the length for that you have held the investments. In case the product is bought after 36 months the earnings are dealt with as long time capital profits and taxed on the flat charge of 20 percent making use of the value inflation index to the value of acquisition. In case those are bought inside 36 months, the profits are dealt with as quick time period capital profits and taxed on.