Capital Gains · AY 2026-27

Tax on Gold in India —
LTCG 12.5%, SGB Exempt

How gold is taxed when you sell it: the 24-month LTCG rule at 12.5%, STCG at your slab rate, the Sovereign Gold Bond exemption, gold ETF and gold-fund treatment, plus the 3% GST you pay on purchase.

Updated for FY 2025-26 CA Reviewed Physical · SGB · ETF · Funds

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12.5%LTCG on gold

24 monthsLTCG holding

ExemptSGB maturity

3%GST on gold value

Quick Answer

Gold is taxed as a capital asset when you sell it. Physical gold, jewellery, coins or bars held for more than 24 months attract Long-Term Capital Gains (LTCG) at 12.5% under Section 112 (no indexation, per Budget 2024); held for 24 months or less, gains are Short-Term (STCG) and taxed at your slab rate. Sovereign Gold Bonds (SGB) redeemed with the RBI at maturity are fully exempt. Gold ETFs and gold funds follow the same 24-month / 12.5% rule. Buying gold attracts 3% GST plus 5% GST on making charges.

LTCG > 24m 12.5%

STCG ≤ 24m Slab

SGB maturity Exempt

GST on gold 3%

Budget 2024 changed gold LTCG — and removed indexation

For gold sold on or after 23 July 2024, the LTCG rate is a flat 12.5% with no indexation, and the holding period to qualify as long-term dropped to 24 months. The earlier 20%-with-indexation / 36-month regime no longer applies to fresh sales. The section is renumbered under the Income-tax Act, 2025 (effective AY 2026-27) but the treatment is unchanged.

All gold types

Gold Tax Summary — FY 2025-26

How each form of gold is taxed on sale, the holding period that makes gains long-term, and the applicable rate.

Gold form	LTCG holding	LTCG rate	STCG	Note
Physical gold — bars / coins	Over 24 months	12.5%	Slab rate	No indexation (Budget 2024)
Gold jewellery	Over 24 months	12.5%	Slab rate	Same as physical gold
SGB — RBI maturity (8 yrs)	—	Exempt	—	Exempt u/s 10(47)
SGB — sold on exchange early	Over 24 months	12.5%	Slab rate	Normal capital-gains rules
Gold ETF	Over 24 months	12.5%	Slab rate	Non-equity fund treatment
Gold mutual fund (FoF)	Over 24 months	12.5%	Slab rate	Same as gold ETF
Digital gold	Over 24 months	12.5%	Slab rate	Taxed like physical gold

Rates and holding periods reflect Budget 2024 as applicable for AY 2026-27. LTCG has a 4% health & education cess on top.

The maths

How Capital Gains on Gold Are Calculated

The taxable gain is your sale price minus cost of acquisition minus transfer expenses. For gold bought or sold on or after 23 July 2024 there is no indexation — you compare the actual purchase cost with the sale value and apply 12.5% if long-term.

LTCG — held over 24 months

Sale valueRs 6,00,000

Less: costRs 4,00,000

Capital gainRs 2,00,000

LTCG @ 12.5%Rs 25,000

Tax + 4% cessRs 26,000

STCG — held 24 months or less

Sale valueRs 6,00,000

Less: costRs 4,00,000

Capital gainRs 2,00,000

Tax @ 30% slabRs 60,000

Tax + 4% cessRs 62,400

Inherited or gifted gold — you inherit the cost and the clock

For gold received by inheritance or as a gift, the cost of acquisition is the price paid by the previous owner, and the holding period includes the period they held it. So if a parent held gold for 20 months, gifted it to you, and you sell it 6 months later, the combined 26-month holding qualifies for the 12.5% LTCG rate. Gifts from specified relatives are exempt when received; tax arises only on later sale.

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The tax-smart option

SGB, Gold ETF & Gold Funds

Sovereign Gold Bonds are the most tax-efficient way to hold gold. If you hold to maturity and redeem with the RBI, the capital gain is fully exempt under Section 10(47). The 2.5% annual interest, however, is taxable as income from other sources at your slab rate.

Choose SGB / paper gold if

You are investing for 8 years and want the maturity exemption
You want to avoid making charges, storage and purity worries
You value the extra 2.5% annual interest on SGBs

Physical gold suits you if

You want jewellery to wear or gift, not just an investment
You may need to sell before an 8-year SGB tenure
You prefer holding the metal in hand

Gold ETFs and gold mutual funds are treated as non-equity funds: LTCG at 12.5% after 24 months, STCG at your slab rate. Selling SGBs on the stock exchange before maturity is a normal transfer and follows the same capital-gains rules — the maturity exemption applies only to RBI redemption.

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At purchase

GST on Buying Gold

GST is a consumption tax paid when you buy gold — it is separate from the income-tax capital gains you pay when you sell. GST paid on purchase does not get added to your cost of acquisition for capital-gains purposes.

Transaction	GST
Gold value (bars, coins, jewellery)	3%
Making / craftsmanship charges	5%
Import of gold	3% IGST + customs duty

See our GST on gold guide for invoice-level detail and reverse-charge on old-gold exchange.

Filing

How to Report a Gold Sale in Your ITR

Gather recordsPurchase bill, sale invoice, dates

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Compute the gainSale − cost − expenses

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Pick the right ITRITR-2 or ITR-3, Schedule CG

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Split LTCG / STCGBy 24-month holding period

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File & payLTCG 12.5% or STCG at slab

Report it — the sale may already be in your AIS

Large gold or jewellery transactions and mutual-fund/ETF redemptions can appear in your Annual Information Statement (AIS). Reconcile the AIS with your own records before filing; omitting a reported gold sale is a common trigger for a notice. Gold gains cannot be shown in ITR-1 — use ITR-2 or ITR-3.

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Government sourcesSection 112 & capital gains: incometax.gov.in · SGB scheme & redemption: rbi.org.in · Budget 2024 (LTCG 12.5%, 24-month holding, no indexation) · GST on gold: gst.gov.in

Gold Tax — Frequently Asked Questions

Capital Gains Basics

What is the capital gains tax on gold in India for FY 2025-26?

Physical gold or jewellery held for more than 24 months attracts Long-Term Capital Gains (LTCG) at 12.5% under Section 112, with no indexation following Budget 2024. Held for 24 months or less, gains are Short-Term (STCG) and taxed at your applicable income-tax slab rate. Gold ETFs and gold mutual funds follow the same 24-month rule — 12.5% LTCG and slab-rate STCG.

What is the holding period for long-term capital gains on gold?

24 months. Following Budget 2024, gold and other unlisted/physical capital assets held for more than 24 months qualify as long-term. Earlier the threshold was 36 months. If you hold gold for 24 months or less, the gain is short-term and taxed at your slab rate.

Is indexation available on gold sales?

No, not for gold sold on or after 23 July 2024. Budget 2024 removed the indexation benefit and set a flat 12.5% LTCG rate. You now compute the gain as sale price minus actual cost minus transfer expenses, without adjusting cost for inflation.

How much tax do I pay if I sell gold at a profit?

If long-term (held over 24 months), you pay 12.5% of the capital gain plus 4% health & education cess — an effective 13%. If short-term (held 24 months or less), the gain is added to your income and taxed at your slab rate. For example, a Rs 2 lakh long-term gain attracts about Rs 26,000 in tax.

SGB & Paper Gold

Is SGB maturity redemption taxable?

No. Capital gains on redemption of Sovereign Gold Bonds at maturity (after 8 years) by the RBI are fully exempt under Section 10(47) of the Income-tax Act. This is a major advantage of SGBs. However, if you sell SGBs on the stock exchange before maturity, normal capital-gains rules apply: LTCG at 12.5% if held over 24 months, or slab-rate STCG if held 24 months or less.

Is the interest on Sovereign Gold Bonds taxable?

Yes. The 2.5% per-annum interest paid on SGBs is taxable as income from other sources at your slab rate every year. Only the capital gain on redemption with the RBI at maturity is exempt — the interest is always taxable.

How are gold ETFs and gold mutual funds taxed?

Gold ETFs and gold fund-of-funds are treated as non-equity funds. Units held for more than 24 months attract LTCG at 12.5%; held for 24 months or less, gains are short-term and taxed at your slab rate. There is no securities transaction tax benefit — the treatment is the same as physical gold on the holding-period test.

Is digital gold taxed the same as physical gold?

Yes. Digital gold bought through apps or platforms is taxed like physical gold on sale — LTCG at 12.5% if held over 24 months, STCG at slab rate otherwise. Keep the purchase and sale records from the platform to compute the gain.

Gifts & Inheritance

If gold was received as a gift, is it taxable when I sell it?

Gold received as a gift from a specified relative (spouse, parents, siblings and other listed relatives) is exempt from tax at the time of receipt. When you later sell it, capital gains tax applies. The cost of acquisition is the price originally paid by the donor, and the holding period includes the period the donor held the gold. So a donor holding for 20 months plus 6 months by you totals 26 months — qualifying for the 12.5% LTCG rate.

How is inherited gold taxed when sold?

Inheriting gold is not itself taxable. When you sell inherited gold, the cost of acquisition is the cost to the previous owner (or, if bought before 1 April 2001, the fair market value on that date can be used), and the previous owner's holding period is added to yours to decide LTCG vs STCG. Long-term gains are taxed at 12.5%.

GST on Gold

Is GST applicable on gold jewellery purchase?

Yes. When you buy gold jewellery you pay 3% GST on the gold value plus 5% GST on the making charges. This GST is a consumption tax paid at purchase and is separate from the income-tax capital gains you pay on sale. It does not get added to your cost of acquisition for capital-gains purposes.

What is the GST on importing gold?

Import of gold attracts 3% IGST in addition to applicable customs duty. The 3% GST on the gold value continues to apply at the point of domestic sale as well. Making charges on jewellery are taxed separately at 5%.

Reporting

How do I report a gold sale in my ITR?

Report the gain as capital gains in ITR-2 or ITR-3 (not ITR-1). In Schedule CG, enter the full sale value, cost of acquisition and transfer expenses. Show long-term gains (held over 24 months) under Section 112 at 12.5%, and short-term gains under the slab-rate head. For inherited or gifted gold, use the previous owner's cost and add their holding period.

Will my gold sale show up in AIS?

It can. Large jewellery purchases and redemptions of gold ETFs, mutual funds or SGBs may be reported in your Annual Information Statement (AIS) via SFT or broker/AMC feeds. Reconcile your AIS with your own records before filing, and report the sale even if it does not appear — omitting a reported transaction is a common cause of income-tax notices.

Is there any exemption to save LTCG tax on gold?

You can reinvest long-term capital gains from gold under Section 54F by buying a residential house (subject to conditions), which can exempt the gain fully or partly. There is no Section 54EC bond option for gold gains. For SGBs specifically, holding to maturity and redeeming with the RBI makes the gain exempt outright.

Done-for-you

Related TaxClue Services

Income Tax Return FilingCA-assisted ITR-2/ITR-3 with your gold capital gains computed and reported.Explore →Capital Gains CalculatorWork out LTCG or STCG on a gold sale before you file.Explore →Sovereign Gold Bond TaxThe SGB maturity exemption and interest taxation, explained.Explore →GST on GoldThe 3% + 5% GST you pay when buying gold and jewellery.Explore →

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