Investors seem confused about how gold investments will be taxed after Budget 2024. This is natural since there is still some ambiguity about the holding periods of listed assets like gold ETFs and sovereign gold bonds. Here is a quick summary.
Physical Gold: slab rate (<2Y); 12.5% (>2Y)
The tax will be at the applicable slab rate if the holding period is two years or less. For older investments, it is 12.5% without indexation.
Digital Gold (except Sov Gold Bonds): slab rate (<2Y); 12.5% (>2Y)
The tax will be at the applicable slab rate if the holding period is two years or less. For older investments, it is 12.5% without indexation.
Gold Funds: slab rate (<2Y); 12.5% (>2Y)
The tax will be at the applicable slab rate if the holding period is two years or less. For older investments, it is 12.5% without indexation.
Gold ETFs: slab rate (<1Y); 12.5% (>1Y)
The tax will be at the applicable slab rate if the holding period is one year or less. For older investments, it is 12.5% without indexation. The holding period is one year because gold ETFs are listed assets.*
Sovereign Gold Bonds: slab rate (<1Y); 12.5% (>2Y)
If sold on maturity, Sov gold bonds are tax-free (assuming you get a profit!)
If you sell mid-term:
The tax will be at the applicable slab rate if the holding period is one year or less. For older investments, it is 12.5% without indexation. The holding period is one year because these bonds are listed assets.*
*There is some discrepancy in the interpretation. Many sources claim the holding period for LTCG is two years, but since these are listed assets, it should be one year as per budget documents. The article will be updated as and when more clarity emerges.
Also read:
- Budget 2024: FAQ on capital gains taxation
- Budget 2024: Additional Questions on capital gains taxation