Physical gold and gold mutual funds require a holding period exceeding 24 months to qualify for the 12.5% long-term capital gains tax, whereas gold ETFs achieve that status after just 12 months. Purchasing physical jewellery also incurs an upfront 3% Goods and Services Tax applied to the total value including making charges. Upcoming changes effective April 1, 2026, will restrict Sovereign Gold Bond maturity tax exemptions strictly to original subscribers. Additionally, all periodic interest distributed by Sovereign Gold Bonds continues to be taxed at individual slab rates.
Key points
Gold mutual funds mandate a holding duration of more than 24 months to secure long-term c…: Gold mutual funds mandate a holding duration of more than 24 months to secure long-term capital gains tax treatment.
Starting April 1, 2026, Sovereign Gold Bond maturity tax exemptions will strictly benefit…: Starting April 1, 2026, Sovereign Gold Bond maturity tax exemptions will strictly benefit original issue subscribers rather than secondary market buyers.
Periodic interest payments received from Sovereign Gold Bonds remain fully taxable at the…: Periodic interest payments received from Sovereign Gold Bonds remain fully taxable at the individual investor's income slab rate.
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Gold has long held a special place in Indian homes, both as a valuable possession and an investment. In modern times, gold investment is no longer not limited to jewellery, coins, or bars. People can now invest in gold exchange-traded funds (ETFs), fund of funds (FoFs), Sovereign Gold Bonds (SGBs), digital gold, etc., to make gains.
But the gains from the gold investment also come with an income tax bill. The tax you pay depends on the type of gold investment and the holding period.
As many people buy and sell gold, especially during the festivals of Dhanteras and Diwali, here we take you through the tax you need to pay on gains from investments in physical gold, gold ETFs, FoFs, and SGBs.
Physical gold taxation
Chartered accountant Chintan Ghelani, Partner-Direct Tax at N. A. Shah Associates LLP, told ET Wealth Online that an investor pays tax on physical gold not only when they sell but also when they buy it.
Ghelani says if the holding period is 24 months or less, the gain qualifies as short-term capital gain (STCG),…
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Indian regulators are reviewing compliance costs compared to peer economies to prevent global capital from bypassing the country for alternative destinations. SEBI plans to issue a consultation paper aimed at aligning domestic regulations with international standards while safeguarding market integrity. These combined regulatory efforts seek to deepen local capital markets to meet expanding domestic financing needs.