The price of gold is rising in such a way that it is becoming increasingly out of the reach of the common man. At present, the price of gold in India has reached more than Rs 70 thousand. Now those who have gold or those who have invested in it are happy with this rise. Those who were thinking of buying gold are currently in shock. Today we are not telling you about the bargain price of gold, rather we are telling you that if you are thinking of earning from gold, then you must know about the tax imposed on it.
Invest in many ways
Many people invest in physical or gold bonds. Physical gold is the jewelery present in our homes. Many people buy gold coins or jewelery keep them in a locker and then sell them when the price increases. Some people also invest in gold mutual funds. Similarly, it also happens in Gold Bond, in which you get virtual gold. Now let us know how much tax you have to pay on selling gold.
How much is the tax?
If you sell gold then it is necessary to pay tax on it. If you do not do this, a notice can be issued against you. If you are selling gold within three years then it comes under short-term capital gain. In this, tax is collected from you as per the tax slab only. Whereas if you earn money by selling gold after three years, then you will have to pay taxes up to 20.8 percent as long-term capital. Similarly, tax has to be paid on gold mutual funds also. There is a rule of three years in this also.
Now if we talk about gold bonds, it is for 8 years. If you make capital gains from it after 8 years, you will not have to pay any tax. This is completely tax-free. However, if you encash it before 8 years, you may have to pay tax.
Tax only on profits
Now if you are wondering why tax is being collected on your gold and from you, then let us tell you the mathematics. If you have bought gold worth Rs 5 lakh and after a few years it becomes worth Rs 8 lakh, then you have to pay tax not on Rs 8 lakh but on Rs 3 lakh. That means tax has to be paid only on the profit earned.
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