India is the world’s largest bullion buyer, some analysts estimate that about 10% of the world’s stock of gold is kept with our households and religious trusts. Our gold imports have added to many a governments’ worries. But our Diwali is incomplete without bringing the yellow metal home 🙂
Did you know The IT Department considers it a Capital Asset, and Capital Gains may apply when you sell it! It may be bought or used for personal purposes, but the gains on its sale are taxable as Capital Gains.
Usually, gold in Indian households is handed down generations. Bollywood is rife with stories of jewellery gifted from one generation to another. Income Tax exempts Gifts of Gold received as inheritance, or received on marriage or received from a Relative. However, in case you decide to sell these assets, you may have to pay tax on the capital gains. The acquisition cost here shall be taken as the cost to the previous owner. And indexation shall be applied to this cost, of the year in which the previous owner purchased it. Assuming this is a long term capital gain, tax would be charged at 20%.
Don’t let this prevent you from indulging yourself with the next piece of jewellery this season! Happy Dhanteras!
Just in case you need help with your taxes don’t forget to write in to firstname.lastname@example.org, we are here to help!