Gold is bought in large quantities in India on occasions ranging from weddings to festivals. People also gift gold jewelery on special occasions. All these are taxed in different situations. In such a situation, today in this news we are going to tell you about the tax applicable on gold received as a gift.
India is included in those countries of the world, where gold is consumed in large quantities. On occasions ranging from weddings to festivals, people fiercely shop for gold. People also give the most preference to gold jewelry for gifting to close people on occasions like marriage and birthday. But do you know that such gold ornaments given as gifts are not tax free. After a limit, tax on gift is made on them.
Not all gifts are tax free
Archit Gupta, an expert in tax related matters and Founder-CEO of Clear Tax, says that in some cases the gold received as a gift is tax free. If the family members give gold ornaments as gifts on marriage or any other occasion, then they are tax free. There is no tax liability on gold jewelery that is inherited from one generation to another. In this situation, there is no limit to the quantity and price of jewellery. But when you go to sell such jewelry, then tax liability will be created.
Capital gain liability-
If you sell the inherited gold, you are liable to capital gains in the long term. Capital gain is calculated on the basis of holding period. The holding period of gold is calculated from the day of its purchase. Suppose your mother gifted you gold ornaments on the wedding.
These ornaments were given to her by her father i.e. your maternal grandfather on her marriage. Nana had bought these ornaments for one lakh rupees in those days. So for the purpose of computing capital gain, the initial value of the jewelery will be considered as Rs 1 lakh. Then one lakh rupees will be deducted from the current price to get capital gain, on which you will have to pay tax.
How much will be the tax?
The rate of capital gain depends on the holding period. If the holding period is more than 36 months, then long term capital gain tax will be applicable. This is 20 percent. Short Term Capital Gain Tax will be applicable if the holding period is less than 36 months. To decide its rate, the amount received from selling jewelry will be added to your total income. Then the tax slab in which your income comes. Accordingly you will have to pay tax.
Gold tax free received as a gift
All gifts received on marriage are also not tax free. Gifts received from people outside the family are exempt from tax up to a limit. Gifts worth up to Rs 50,000 are tax-free during a tax assessment year. If you receive gifts of more than Rs 50 in a year, then tax liability is created. If the value of all the gifts taken together exceeds Rs 50,000, then tax is payable on the entire value.
