If you are a investor and investing in Gold to earn higher returns. If you haven’t know the tax implications on selling gold till now; you have to know it immediately; otherwise you may receive a notice from “Income Tax” Department
Tax Implications on Selling Gold–
As per Tax Laws, Gold is considered to be a “Debt” instrument and all the laws applicable to debt instruments would be applicable to Gold also.
Short-Term Gains on Sale of Gold– For Debt instruments, short term refers to 3 Years or Below. That means, if you sell the gold within 3 Years of your purchase, it would be “added to your income and taxed as per your income tax slab rate.”
For Example, if you fall in 30% Tax Bracket and purchased the gold at 50,000rs and sell it for1 Lakh, the accrued amount(50,000 rupees) would be added to the income and taxed at 30%
Please note that the tax applicable would be on Capital Gain(The accrued income beyond the Purchase Price) only
Long-Term Capital Gain on sale of Gold-If The accrued income beyond the purchase price is kept hold for more than 3 Years and sold after that; You would be subject to 20% Tax with Indexation Benefit(Inflation adjusted) along with 4% Cess
There is no tax-deducted at source if you sell the gold except STCG OR LTCG; Depending on your holding period.
So before selling gold, follow the guidelines and reduce the tax-liability.