look news india
Investing in Gold: The price of gold in the local markets has crossed the level of 74 thousand and has reached a record high, on MCX too the price of gold has crossed 71 thousand. Investors who want to book profits by taking advantage of the gold boom should keep these things in mind, otherwise they will have to face income tax notices.
Capital gains tax has to be paid on the profits made on investment in gold. If you do not pay tax on the profits earned from this, an income tax notice may be issued against you. If physical gold is sold within 3 years, short term capital gain is calculated on it. The profits arising from this are taxed as per the income tax slab.
20.8 percent tax on physical gold
Short term capital gains tax has to be paid if profits are booked within 3 years on investment in physical gold including gold jewellery, coins. Long-term capital gains tax at the rate of 20.8 per cent is applicable on profit realized on sale of gold that is 3 or more years old.
Gold ETFs and gold mutual funds, as well as sovereign gold bonds, are taxed like physical gold. Apart from this, the interest received on gold bonds at the rate of 2.50 percent is also taxed. Whereas after 8 years, the capital gain on this is completely exempted from tax. Gold ETFs, gold mutual funds and sovereign gold bonds also attract long-term capital gains tax of 20.8 percent.
Internationally, gold is giving 17 percent return since February. In the last 20 years, gold has given a return of 1150 percent. The precious metal has given returns of 161 percent in the last decade. While it has registered a jump of 123 percent in five years, it has increased by 17.44 percent in the current calendar year.
