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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
After the RBI's decision to phase out ₹2000 denomination currency notes, there are reports indicating a surge in demand for gold jewelry.
One precious metal whose value has only increased over time is gold. In India, purchasing gold during a celebration is said to be lucky. Many of us love having gold, whether coins or jewelry, in our homes.
Understanding the terms and conditions, fees, and the process of converting digital gold into physical gold, if desired, is crucial for making informed investment decisions in this evolving financial landscape.
There is no limit on how much gold jewelry you can keep at home, provided you can explain the source of income that allowed you to buy or invest in case of an income tax investigation. However, there are limits on the amount of unaccounted gold jewelry that can be kept at home without any tax troubles. According to the Central Board of Direct Taxes (CBDT), the limits for holding gold jewelry and ornaments without showing any proof are:
Gold, often hailed as a symbol of wealth and prosperity, is significant in the financial world. As individuals buy, sell, and exchange gold for various purposes, understanding how gold is taxed is crucial for making informed financial decisions.
The Goods and Service Tax (GST) is applied at 3% on acquiring gold and 5% on the associated making charges. In the case of exchanging gold items such as bars or coins for new jewelry, no additional GST is imposed up to the weight equivalent to the exchanged gold (bars or coins). GST only applies to the value exceeding the weight of the exchanged gold.
It is important to note that no GST is levied on the outright sale of gold.
Receiving gold in the form of jewelry, bullion, Gold Exchange-Traded Funds (ETFs), or Gold Mutual Funds (MFs) as a gift becomes taxable if the aggregate market value of the received gold exceeds ₹50,000. The taxation is categorized under the ‘Income from other sources’ and is subject to applicable slab rates based on your income bracket.
Nevertheless, certain exemptions from taxation are provided by the Act in specific circumstances:
A short-term capital gains tax will be assessed if you sell the physical gold within three years of purchasing it; if you sell it beyond that time, a long-term capital gains tax will be assessed. The short-term capital gains will be taxed at the income tax slab rate and added to the total taxable income. Meanwhile, the cost of purchasing digital gold has no upper limit. However, you can only spend up to ₹2 lakh on gold daily.
Long-Term Capital Gains Tax (LTCG) for physical and digital gold is payable at a 20% + cess and fee rate when selling digital gold after three years. Returns on digital gold, however, are not immediately taxable if kept for less than three years.
Gold, often referred to as the “king of metals,” has captivated humanity for centuries due to its intrinsic beauty, rarity, and enduring value. While the allure of gold is universal, not all gold is created equal. The various types of gold, each with distinct characteristics and applications, contribute to the rich tapestry of this precious metal.
Physical gold refers to the tangible form of this precious metal, commonly available in coins, bars, or jewelry. Unlike paper or digital representations of wealth, physical gold provides individuals with a concrete and enduring asset that has been valued for its beauty, rarity, and intrinsic worth throughout human history.
One of the distinctive qualities of physical gold is its historical significance. Across civilizations and centuries, gold has symbolized wealth, power, and luxury. It has been used as currency, adornment, and a store of value. Even in the modern era, physical gold maintains its allure, connecting investors to the enduring legacy of this precious metal.
Digital gold refers to a form of investment that allows individuals to own and trade gold in electronic or digital format, eliminating the need for physical possession of the precious metal. This innovative financial instrument leverages technology to provide investors a convenient and accessible way to participate in the gold market.
Individuals can only invest a maximum of 4 kg per year in SGB. The holdings used as collateral by banks and other financial institutions will not be included in the investment ceiling.
No outward costs are associated with purchasing sovereign gold bonds (SGBs), as you are not required to pay GST. An SGB receives interest at 2.5% annually, added to taxable income and assessed according to the applicable slab. After eight years, SGB profits are, however, tax-free.
LTCG applies to mutual funds and gold ETFs when held for more than three years. For investments made for less than three years, the rate is the same (20% plus 4% cess), and the gains are applied to your taxable income and taxed according to your IT slab.
The expenses, minimum and maximum limitations, and tenure times of various gold investment products vary. Therefore, before investing, be sure to exercise due diligence.
Owning gold at home is a common practice, and while there are no strict limits on jewelry, there are guidelines for gold coins and bars. Understanding the income tax rules related to gold ownership is crucial to ensure compliance and transparency in financial matters. It is advisable to stay updated on any regulation changes and consult with financial experts for the most accurate and current information regarding gold ownership and income tax implications.
The general public has always been satisfied when investing in gold because it is precious. Different gold investments vary in expenses, tenure times, and minimum and maximum limitations. Therefore, it becomes essential to conduct thorough research and analysis before making the decision to invest in gold.
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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999