Gold Tax India 2025-26 — Capital Gains on Gold Sale, SGB & Gold ETF

Updated: 3 June 2026 | Budget 2024 Rates | Section 112 | Income-tax Act, 2025

Tax on gold sale (FY 2025-26): Physical gold or jewelry held for more than 24 months — LTCG taxed at 12.5% under Section 112 (no indexation, Budget 2024 change). Held 24 months or less — STCG at slab rate. Sovereign Gold Bonds (SGB): maturity redemption by RBI is fully EXEMPT from capital gains tax. Premature SGB redemption: LTCG 12.5% if held >24 months. Gold ETF / Gold Mutual Funds: same rules — LTCG 12.5% (>24 months), STCG at slab rate. GST on gold purchase: 3% on gold value + 5% on making charges.

EXEMPT

SGB maturity (8 years) — capital gains fully EXEMPT from income tax.
Interest on SGBs (2.5% p.a.) is taxable as income from other sources. Only the capital gain at RBI redemption is exempt.

Gold Tax Summary — All Gold Types (FY 2025-26)

Gold Type	Holding for LTCG	LTCG Rate	STCG Rate	Note
Physical gold / bars / coins	24+ months	12.5% (Sec 112)	Slab rate	No indexation from Budget 2024
Gold jewelry	24+ months	12.5% (Sec 112)	Slab rate	Same as physical gold
Sovereign Gold Bonds (SGB) — RBI maturity	8 years	EXEMPT	N/A	Fully exempt under Sec 10(47)
SGB — premature redemption / exchange sale	24+ months	12.5%	Slab rate	Same capital gains rules apply
Gold ETF	24+ months	12.5%	Slab rate	Treated as non-equity MF
Gold Mutual Fund (fund of funds)	24+ months	12.5%	Slab rate	Same as gold ETF

GST on Gold — Quick Reference

Transaction	GST Rate
Purchase of gold (bars, coins, jewelry)	3% on gold value
Making charges on jewelry	5%
Sale of old gold to jeweler	3% (reverse charge in certain cases)
Import of gold	3% IGST + customs duty

How Capital Gains Tax on Gold is Calculated

For physical gold (LTCG — held >24 months): Capital Gain = Sale price − Cost of acquisition − Transfer expenses. From Budget 2024, indexation (cost inflation index) is no longer available on gold sales for assets purchased on or after 23 July 2024. Tax = 12.5% of capital gain + 4% H&E cess = effective 13%.

For inherited or gifted gold, the cost of acquisition is the original cost paid by the previous owner (giftor/deceased). The holding period includes the period the previous owner held the gold — relevant for determining LTCG vs STCG.

Frequently Asked Questions

What is the capital gains tax on gold in India?

Tax on gold depends on the holding period. Physical gold or gold jewelry held for more than 24 months: Long Term Capital Gains (LTCG) at 12.5% under Section 112 (no indexation, Budget 2024). Held for 24 months or less: Short Term Capital Gains (STCG) taxed at your applicable income tax slab rate. Gold ETFs and Gold Mutual Funds follow the same 24-month rule with 12.5% LTCG and slab-rate STCG.

Is SGB (Sovereign Gold Bond) maturity redemption taxable?

No. Capital gains arising on redemption of Sovereign Gold Bonds (SGB) at maturity (after 8 years) by the RBI are fully EXEMPT from capital gains tax under Section 10(47) of the Income-tax Act. This is one of the biggest tax advantages of SGBs. However, if you sell SGBs on the stock exchange before maturity (premature redemption), capital gains tax applies: LTCG at 12.5% if held over 24 months, or slab-rate STCG if held 24 months or less.

Is GST applicable on gold jewelry purchase?

Yes. GST on gold is 3% on the value of gold, plus 5% GST on making charges. If you buy gold jewelry, you pay 3% GST on the gold value and 5% GST on the craftsmanship/making charges separately. This GST paid at the time of purchase does not add to your cost of acquisition for capital gains purposes under income tax — it is a consumption tax paid separately.

How to report gold sale in ITR?

Gold sale proceeds must be reported as capital gains in your Income Tax Return. Use ITR-2 or ITR-3 (not ITR-1). In Schedule CG, report: Full sale value, Cost of acquisition (with or without indexation as applicable), Transfer expenses. For LTCG (held >24 months): Section 112. For STCG (held ≤24 months): slab rate. Inherited or gifted gold: cost is the original cost of the previous owner; holding period includes the previous owner's period.

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

Gold received as a gift from specified relatives (spouse, parents, siblings, etc.) is exempt from tax at the time of receipt. However, when you later sell the gifted gold, capital gains tax applies. The cost of acquisition for tax purposes is the original cost paid by the donor (not the market value at the time of gift). The holding period for determining LTCG/STCG includes the period for which the donor held the gold. So if your parent held gold for 20 months and gifted it, and you sell it 6 months later — combined holding of 26 months qualifies for LTCG rate of 12.5%.

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