Looking to gift or invest in gold this festive season? Beware of the tax implications
Gifting manners during festivals have changed. However, not all have succumbed to the new-age glitzy gifting styles picked and decided in tune with marketing gimmicks and easy gifting options. However, some people still prefer the old-school line of thought when it comes to giving and receiving gifts in gold and silver. As our old people say, “Trends may change but values never change". Each day of the festival, commencing from the onset of Navaratris and extending until Diwali, brims with profound significance and symbolism.
Gold stands as a preeminent symbol within Indian culture, held in high esteem for its exquisite allure, unadulterated purity, and enduring value. With a history spanning centuries, gold has become an indispensable element of Indian heritage. Unquestionably, gold occupies a unique and cherished spot in the hearts of the Indian populace, elucidating the widespread practice of purchasing and investing in gold and silver during festive occasions.
Prior to making any decision, it’s crucial to have a clear understanding of the tax ramifications tied to investments in gold and silver. Below are some essential tax factors to bear in consideration:
Capital gains tax: Investments in gold and silver are subject to capital gains tax (CGT) in India. CGT pertains to the tax levied on the profits obtained when selling a capital asset, like gold or silver. To determine the nature of the gain, the holding period is set at three years. If you sell your gold or silver within three years of purchase, any resulting profit falls under the category of short-term capital gains (STCG). The STCG is taxed according to your applicable income tax slab rate. On the other hand, if you sell your gold or silver after a holding
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