Gold prices are soaring to record highs, making it a tempting opportunity for many investors and households to sell their old gold holdings for a handsome return. But before you head to the jeweller or open your digital gold vault, it's essential to understand the tax implications of selling gold—whether physical, inherited, or digital.
🪙 Is Selling Gold Taxable in India?
Yes. In India, gold is treated as a capital asset. When you sell it, any gain made is subject to capital gains tax. The tax liability depends on:
- Type of gold (physical, digital, paper)
- Holding period (short-term or long-term)
- Whether it was purchased or inherited
- Availability of purchase receipt
Let’s break it down:
🏠 Selling Inherited or Old Family Gold (Even Without Receipts)
If you're selling old, inherited gold—perhaps family jewellery passed down from your grandparents—you will still have to pay tax. It is classified as an inherited capital asset, and if held for over 24 months, it qualifies as Long-Term Capital Gains (LTCG).
🔢 How Is Tax Calculated?
For inherited gold, the fair market value as of April 1, 2001 is considered as the purchase price.
Example:
- You sell old gold in 2025 for ₹10 lakh
- Fair market value as of 1 April 2001 is ₹3 lakh
- Capital Gain = ₹10 lakh – ₹3 lakh = ₹7 lakh
- LTCG Tax = 20% (with indexation benefits)
- Effective tax including cess and surcharge: approx. 20.8%
✅ No purchase receipt? No problem.
You can get the gold's value certified by a registered valuer, who can assess its fair market value as of April 1, 2001.
📱 What About Digital Gold?
Digital gold is treated just like physical gold for tax purposes.
- Held for 36+ months: Taxed as LTCG at 20.8%
- Held for less than 36 months: Taxed as Short-Term Capital Gains (STCG) and added to your income tax slab
This applies to:
- Gold ETFs
- Sovereign Gold Bonds (on premature sale in secondary market)
- Digital gold bought via Paytm, PhonePe, Groww, etc.
💡 Note: Unlike physical gold, digital gold is not directly regulated by RBI or SEBI, but the taxation rules remain the same.
⚠️ Key Points to Remember
| Type of Gold | Holding Period | Tax Type | Tax Rate |
|---|---|---|---|
| Physical Gold | < 36 months | STCG | As per income tax slab |
| Physical Gold | > 36 months | LTCG | 20.8% with indexation |
| Inherited Gold | > 24 months | LTCG | 20.8% with indexation |
| Digital Gold | < 36 months | STCG | Income tax slab rate |
| Digital Gold | > 36 months | LTCG | 20.8% |
📝 Final Thoughts
Selling gold can be profitable in the current market, but understanding the tax you owe is crucial to avoid surprises later. If you’re selling inherited gold, especially without receipts, make sure to get a valuation certificate from a recognized professional.
Whether it's for profit booking, liquidity, or investment shift—plan your gold sale wisely and consult a tax advisor if needed.
