Gold Purchasing Tips: Nowadays people's inclination towards investing in gold has increased. It is considered a better option for investment (gold investment) for safe and high returns. Whenever you sell gold, income tax has to be paid as per the rules.

There are many rules for tax on selling gold. These rules have also been changed some time back. You can get caught in the clutches of the income tax department at any time for tax evasion. Therefore, everyone needs to know how much tax will have to be paid for selling gold.

Tax is levied on the sale of all types of gold.

In the July budget for the year 2023, changes were made in the rules related to income tax on selling gold. Be it physical gold paper gold or digital gold, tax has to be paid on selling every kind of gold.

Whenever you sell gold, tax has to be paid on it in two ways. This is according to Short Term Capital Gains (STCG) and Long Term Capital Gains (LTCG).

Tax rules on physical gold

If you keep physical gold like gold jewelry, biscuits, coins, etc., and sell it, then LTCG and STCG tax have to be paid accordingly. If you sell gold within two years of buying it (gold buying tips), then 20 percent of STCG will have to be paid.

4 percent cess is levied on it separately. According to this, a total of 20.8 percent tax (tax rules for gold) has to be paid for two years. If you sell gold after two years of buying it, then 12.5 percent of LTCG has to be paid. There is also a discount on this which has been fixed at Rs 1.25 lakh.

Tax is levied on profits.

Tax is always levied on the profit earned from selling gold (sona bechne par tax). If you sell the gold purchased before two years, you have to pay 20% short-term capital gain and 4% cess.

If you buy gold worth Rs 1 lakh (gold buying tips) and sell it for Rs 1,50,000 before two years, then you get a profit of Rs 50,000. In this way, if the profit comes under the purview of tax (tax limit on gold), then you have to pay tax on it.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.