Physical gold sold after holding it for more than 24 months is taxed at 12.5% LTCG (no indexation) for transfers on or after 23 July 2024 — earlier it was 20% with indexation. Gold ETFs get the same 12.5% LTCG rate but after just 12 months. Sovereign Gold Bonds redeemed at maturity (8 years) are fully exempt from capital gains. Short-term gains (below the holding period) are taxed at your income-tax slab rate. On purchase, gold jewellery carries 3% GST + 5% on making charges.
For gold transferred on or after 23 July 2024, indexation no longer applies. The long-term rate is a flat 12.5% on the actual gain. Budget 2025 made no further change to gold capital-gains rules, so these rates continue for FY 2025-26.
How Each Form of Gold Is Taxed
The holding period and rate depend on which form of gold you hold. Listed instruments (ETFs, SGBs on exchange) qualify for long-term treatment far sooner than physical gold.
| Gold form | Long-term after | LTCG rate | STCG rate |
|---|---|---|---|
| Physical gold (jewellery, bars, coins) | > 24 months | 12.5% (no index) | Slab rate |
| Gold ETF (listed on exchange) | > 12 months | 12.5% | Slab rate |
| Sovereign Gold Bond — held to maturity (8y) | 8 years | Nil (exempt) | — |
| SGB — premature / exchange exit (>12m) | > 12 months | 12.5% | Slab rate |
| Gold mutual fund / FoF (bought Apr 2023 on) | No LTCG benefit | Slab rate | Slab rate |
Post-Budget-2024, indexation is not available. Verify the exact treatment of gold funds at incometax.gov.in — rules for debt/specified funds have changed across FY 2023-24 and 2024-25.
Sold gold, jewellery or ETF units this year? Get the capital-gains computed correctly.
Get ITR Filing Help →Sovereign Gold Bonds — Detailed Tax Treatment
SGBs are issued by the RBI on behalf of the Government of India. They are the most tax-efficient way to hold gold when held to maturity, because the capital gain on redemption is exempt.
| Scenario | Tax treatment |
|---|---|
| Interest (2.5% p.a., paid half-yearly) | Taxable as "Income from Other Sources" at slab rate |
| Redemption at maturity (8 years) | Capital gain Fully exempt |
| Premature redemption via RBI (after 5th year) | LTCG 12.5% if held > 12 months; else STCG at slab |
| Sale on stock exchange before maturity | LTCG 12.5% if held > 12 months; else STCG at slab |
| TDS on interest | No TDS on SGB interest for resident individuals |
The capital-gains exemption applies only when you redeem the SGB at maturity (or in the RBI early-redemption window from the 5th year, for the maturity-type exemption). If you sell on the exchange before maturity, normal LTCG/STCG applies. The 2.5% interest is always taxable at your slab rate. RBI stopped fresh SGB issuances recently — check rbi.org.in for the current status.
GST & Import Duty on Gold
Capital-gains tax applies when you sell; GST and customs duty apply when you buy. For jewellery, GST is charged on both the gold value and the making charges. See our GST on gold guide for the full calculation.
| Item | Rate | Notes |
|---|---|---|
| Gold bars / coins & jewellery (gold value) | 3% | On the transaction value of the gold |
| Making charges (jewellery) | 5% | Charged separately on the making-charge component |
| Gold ETF purchase / sale | Nil | Exchange-traded security — no GST |
| Sovereign Gold Bond | Nil | Government security — no GST |
| Basic Customs Duty on import (BCD) | 5% | Plus 1% AIDC; cut from 15% in Jul 2024 — verify latest notification |
Gold value and making charges are taxed separately (3% + 5%). Import duty was reduced in the Jul 2024 Budget; always confirm the current BCD/AIDC at cbic.gov.in.
A cash payment of ₹2,00,000 or more for gold is prohibited under Section 269ST, with an equal penalty on the recipient. Jewellers report large cash sales in the SFT (Form 61A), and PAN is required for high-value purchases. There is no general TDS when an individual sells gold.
Inherited or Gifted Gold — Cost & Holding
Gold received by inheritance, or as a gift from a relative, is not taxed when you receive it. Tax arises only when you later sell it, and the gain is computed on the previous owner's cost.
- No tax on receipt of gold via inheritance or gift from a relative
- Cost of acquisition = the previous owner's cost (or FMV on 1 Apr 2001 if acquired before that date)
- Holding period includes the period the previous owner held the gold
- On sale, LTCG 12.5% if the combined holding exceeds 24 months (physical gold)
- Keep the original purchase invoices / valuation of the previous owner
Long-term gains from selling gold (physical or ETF) can be exempt under Section 54F if you reinvest the net sale consideration in one residential house in India — buy within 1 year before or 2 years after, or construct within 3 years, subject to the usual house-ownership conditions.
Reinvesting gold gains in a house or filing this year's ITR?
Talk to a TaxClue Expert →- Capital gains & Section 54F: incometax.gov.in
- LTCG 12.5% / no indexation: Finance (No.2) Act 2024 (w.e.f. 23 Jul 2024)
- SGB terms & redemption: rbi.org.in
- GST & customs on gold: cbic-gst.gov.in
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.