Often people sell the gold jewelery kept in the house when needed and do not mention the loss or profit from it in their income tax return, doing so may cost you dearly
If you have invested in gold, then it is very important for you to know that there is a capital gains tax to be paid if there is a profit on selling gold. Often people sell the gold jewelery kept in the house when needed and do not mention the loss or profit from it in their income tax return. But doing so may cost you dearly and may result in heavy fines if caught. If you have ever bought gold in any form or sold ancestral gold in the house, if there is a profit on selling it, then you will have to pay capital gains tax on it. Not paying capital gains tax makes the case of tax evasion. Therefore, mention the advantages or disadvantages of selling gold while filing ITR.
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Whether you have bought gold jewelery, gold coin, gold bar, gold ETF or gold bond, mention the profit on selling it in your income tax return. If you have a loss on selling them, then also mention it in ITR. For tax purpose, make sure that you have gained or lost by selling gold. If you sold it after 36 months of buying gold, then you have to pay long term capital gains tax at the rate of 20.8%. However, in this you also get indexation benefit.
Uniform tax on all types of gold
At the same time, if you sell it within 36 months of buying gold, then the short term capital gains tax is levied on the benefits from it. The profit arising from this is added to the total income of the person and the tax has to be paid according to the tax slab they fall into. Let us tell you that the rule of capital gains tax is the same for physical gold, paper gold and digital gold. 20.8% tax has to be paid for the long term and tax is collected according to the tax slab by adding short term capital gains to the total income. Gold has given up to 40% returns in the last one year, so there is a tax on this profit.
