Gold investment to attract LTCG tax of 12.5% instead of 20% with indexation, holding period cut to 24 months
capital gains on gold to qualify as long term capital gains from 36 months to 24 months and simultaneously cut the LTCG tax rate to 12.5%. Further, indexation available for LTCG calculation for gold has been removed.
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Earlier, indexation for inflation was allowed while calculating long term capital gains on sale of gold and gold jewellery. Indexation allowed the seller to reduce the taxable capital gains by inflating the cost of acquisition as per notified cost inflation index. Earlier, if you have owned the gold for longer than three years, capital gains on its sale would be deemed long-term and subject to 20% tax. Now you will have to pay a flat 12.5% tax rate on long term capital gains on gold sold after a holding period of 24 months (36 months earlier).
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The income tax slab rate will continue to be applicable to those who have short-term capital gains on gold.
The new rules for capital gains on gold come into effect from July 23, 2024 once the budget proposal are passed by the parliament.
As per the explanatory memorandum to the budget, «the short-term capital gains tax is now 20% on all financial assets, while the long-term capital gains tax was
