Gold is an old means of investment. Indians are very fond of gold and they keep buying gold for various occasions. Since the value of gold is high and Indians will buy gold either as an investment or as an ornament, the taxing system wanted a piece of it as well.
The applicable taxes on gold are as follows:
Gold and valuable jewellery comes under the definition of wealth. If wealth exceeds more than Rs.30 lakh, then 1% wealth tax is to be paid. The valuation of gold is carried out as per the rates of 31st March. If the value of the gold is more than Rs.5 lakh, then the valuation report of the gold value has to be obtained from a registered valuer. If you haven’t paid the wealth tax and if there is a raid from the Income Tax Department, then the IT personnel cannot seize 500 grams of gold from married woman and 250 grams from unmarried woman. IT personnel can also not seize the gold that has been disclosed in the wealth tax return. Therefore, it is important that the wealth taxpayer must regularly file the wealth tax return.
1% VAT is charged on the purchase and sale of gold that are carried out in cash in Maharashtra State. Cash transactions are not good for the Economy of India and hence the government puts restrictions on purchase of gold.
Gold ETF (Exchange Traded Funds) can be carried out in the stock markets. This reduces the risk of handling gold. If gold ETF is sold after 12 months from its date of purchase, then long term capital gain is charged at 15% on the profits. If it is sold within 12 months, short term capital gain is levied at 10% on the profits.
Tax free Gold:
Gold is tax free when a woman receives it as a gift at her marriage as per the Hindu Law. But you must keep a record of the gift that you have received a gift at your wedding to avoid confusion with the Income Tax Department.
Read more on Gold
- Gold And Devaluation
- Gold Price Valuation In India
- Reasons Why Gold Rates Fell Since February
- Why Is Gold Rate Fluctuating
- Why Investing In Gold Is A Golden Opportunity
- How Gold Rate Fluctuation Affects Indian Economy
- Top 8 Reasons to Invest in Gold
- How Does Gold Investment Affect Indian Economy?
- How Will Restricting Gold Imports in India Affect Gold Rates?
- Tax on Gold 2016
- Is Buying Gold a Good Investment in 2016
- Top 5 Factors That Affect Gold Rate In India
- Why Gold Prices Are Up
News About Gold Rate Tax
FM stands firm on 1% excise on non-silver jewellery
New Delhi: Despite protests by jewellery traders, finance minister Arun Jaitley stood firm on the decision to impose 1% excise duty on non-silver articles, stating that the move will result in aligning the yellow metal with Goods and Service Tax (GST).
The proposed 1% excise duty will only be levied on jewellers with an annual turnover of Rs.12 crore. In other words, small traders will not have to bear the brunt of the new proposal as the levy is primarily aimed at principal traders and not jewellery makers, per se.
16th March 2016
Third Tranche of Gold Bonds Not So Shiny
The third tranche of gold bonds, priced at Rs. 2,916 per gram, were released by the Union Government last week. This is 8.6 percent higher than the first tranche, which was priced at Rs. 2,684.
Gold bonds come with an interest rate of 2.75 percent on the initial value, which usually makes it an attractive investment opportunity for those who are used to investing in gold in the form of jewellery or coins/bullions. However, at the current price, gold bonds are not so shiny any more.
Financial experts do not expect gold prices to rise high enough for an investment at the current price in the third tranche to yield high returns. If there is a drop in the prices, the investors will benefit slightly from the fixed annual interest payment, but there would incur a capital loss if the price decline is steep.
15th March 2016