If you invest in gold, know that you will have to pay so much income tax on selling

 

Gold is one of the most valuable metals in the world. Considering the returns it makes, it is a great option for long-term investment. This can be gauged from the fact that in the last three years, the price of gold per 10 grams has increased by about 20 thousand rupees. In this era of coronavirus, investment in gold has increased very fast.

 

There are four ways to invest in gold in India. Gold can be purchased in physical form in the form of jewellery or coins from a jewellery shop. However, quality, safety and high cost are always a concern in buying gold jewellery. At the same time, the second method is of paper gold. Gold mutual funds or ETFs are purchased in it. through this, gold can be bought and sell in the stock format in paper format. Apart from this, you can also buy digital gold from the e-payment platform. Apart from these, the government has now given people the option of buying Sovereign Gold Bonds in exchange for buying physical gold. Let me tell you that when you sell gold, you have to pay income tax on it, but at what rate the tax rate will be charged from you, it depends on how you bought the gold.

 

Gold tax on jewellery and coins: Most people buy gold only in the form of gold jewellery and coins. The tax on selling it depends on how long the investor has held the gold jewellery. Some people invest in it for the long term and some people for the short term. If gold is kept for a period of fewer than three years, it will attract short term capital gains tax. Short-term capital gains are added to the income of the investor and the person has to pay income tax according to the tax slab. At the same time, if the gold is kept with you for more than three years or long term, then on selling it on the basis of long term capital gains, the tax will have to be paid by the investor. It has to pay tax at a rate of 20%. Gold mutual funds or ETFs are a very economical way to buy gold. However, selling ETF units is income taxed like physical gold.

 

Tax on Digital Gold: Investing in digital gold is a new way of buying gold. E-payment platforms such as Paytm, Google pay amazon, mobile wallet and brokerage companies from many banks have started selling digital gold through their app by entering into an agreement with SafeGold. On the sale of digital gold, the investor has to pay income tax just like physical gold and gold mutual funds or ETFs.

 

Tax on Sovereign Gold Bonds: In order to encourage people to buy gold bonds in exchange for buying physical gold ie gold jewellery and coins, the central government has given people the option to buy sovereign gold bonds. Sovereign Gold Bonds are issued by Rabi on the direction of the government. Its maturity period is 8 years. After the maturity of this Sovereign Gold Bonds, the government does not charge any tax on the profit. Apart from this, the government also pays interest at 2.5% every year on Sovereign Gold Bonds. But income tax is levied on this interest. At the same time, if you sell a gold bond before the maturity period, then you have to pay income tax on it just like physical gold.