Tax on Gold in India — Capital Gains, GST & Import Duty
Last updated: 3 June 2026
Gold is taxed differently depending on the type (physical, ETF, SGB, mutual fund) and the holding period. Post Budget 2024, LTCG on physical gold is 12.5% without indexation (transfer after 23 July 2024). Sovereign Gold Bonds redeemed at maturity (8 years) are fully exempt. GST applies at 3% on gold jewellery purchases. Import duty stands at 15% basic customs duty.
SGB = 0% tax
Sovereign Gold Bonds redeemed at maturity after 8 years attract zero capital gains tax — the most tax-efficient way to hold gold for long-term investors.
Capital Gains on Physical Gold
Physical gold (bars, coins, jewellery) held for more than 24 months qualifies as a long-term capital asset. Gains are taxed at 12.5% flat (no indexation) for transfers on or after 23 July 2024 (Budget 2024 change; earlier 20% with indexation). Gains from gold held 24 months or less are short-term and taxed at the individual's applicable income tax slab rate.
Cost of acquisition is the actual purchase price. For gold bought before 1 April 2001, Fair Market Value as on 1 April 2001 may be used as the cost.
Capital Gains by Gold Type — Quick Reference
| Gold Type | LTCG Holding Period | LTCG Rate | STCG Rate |
|---|---|---|---|
| Physical gold (jewellery, bars, coins) | > 24 months | 12.5% (no indexation) | Slab rate |
| Gold ETF (listed on exchange) | > 12 months | 12.5% | Slab rate (20% effective from Budget 2024) |
| Sovereign Gold Bond — maturity redemption | 8 years (RBI) | Fully exempt | — |
| SGB — premature redemption (5-yr window) | > 12 months | 12.5% | Slab rate |
| SGB — exchange transfer | > 12 months | 12.5% | Slab rate |
| Gold Mutual Fund (FoF) | — | Slab rate (treated as debt MF post Apr 2023) | Slab rate |
Sovereign Gold Bond — Detailed Tax Treatment
SGBs are issued by the Reserve Bank of India on behalf of the Government. Key tax points:
| Scenario | Tax Treatment |
|---|---|
| Interest (2.5% p.a. semi-annually) | Taxable as "Income from Other Sources" at slab rate |
| Maturity redemption (8 years) | Capital gain FULLY EXEMPT under Income-tax Act 2025 |
| Premature redemption via RBI (after 5th year) | LTCG 12.5% (held >12 months); STCG at slab rate otherwise |
| Transfer on stock exchange | LTCG 12.5% (held >12 months); STCG at slab rate otherwise |
| TDS on interest | No TDS on interest payments for resident individuals |
GST on Gold
| Item | GST Rate | Notes |
|---|---|---|
| Gold bars and coins (≥99.5% purity) | 3% | Applied on transaction value |
| Gold jewellery | 3% | On gold value portion |
| Making charges (jewellery) | 5% | Charged separately on making charges |
| Gold ETF purchase/sale | Nil | Exchange-traded; securities transaction |
| Sovereign Gold Bond purchase/sale | Nil | Government security |
Import Duty on Gold
| Duty Component | Rate |
|---|---|
| Basic Customs Duty (BCD) | 15% |
| Agriculture Infrastructure Development Cess (AIDC) | 5% |
| GST on imported gold | 3% |
| Total effective import duty (approx) | ~23–25% (including IGST and AIDC) |
India reduced BCD from 15% to 6% in Budget 2024 (July 2024) and then revised it; check the latest customs notification for the current effective rate.
Inherited Gold
Gold received through inheritance or as a gift from a relative is not taxable at the time of receipt. "Relative" includes spouse, siblings, siblings of spouse, parents, and lineal ascendants/descendants. When you sell inherited gold:
- Cost = original cost to the previous owner (or FMV on 1 April 2001 if earlier)
- Holding period includes the period the deceased/donor held it
- If total period exceeds 24 months — LTCG at 12.5%
TDS and Reporting on Gold Transactions
There is no specific TDS provision on sale of gold by individuals. However, cash transactions of ₹2,00,000 or more are prohibited under Section 269ST. Jewellers must report cash transactions above ₹2 lakh in Form 61A (Annual Information Return). PAN is required for purchases above ₹2 lakh.
SGB vs Physical Gold vs ETF — Tax Comparison
| Factor | Physical Gold | Gold ETF | SGB (held to maturity) |
|---|---|---|---|
| LTCG holding period | 24 months | 12 months | 8 years (exempt) |
| LTCG tax rate | 12.5% | 12.5% | 0% (exempt) |
| GST on purchase | 3% + 5% making | Nil | Nil |
| Storage cost | Bank locker fees | Low expense ratio | Nil |
| Interest income | Nil | Nil | 2.5% p.a. (taxable) |
| Section 54F eligible | Yes (LTCG only) | Yes (LTCG only) | Yes (LTCG only) |
Frequently Asked Questions
How do I calculate the cost of acquisition for gold purchased several years ago?
For gold purchased on or after 1 April 2001, the actual purchase price (including making charges, if capitalised) is the cost of acquisition. For gold acquired before 1 April 2001, you may use the Fair Market Value (FMV) as on 1 April 2001 as the cost, subject to the condition that FMV does not exceed the actual sale price. Keep invoices or valuation certificates. Under Budget 2024 rules, indexation benefit is no longer available for most capital assets including physical gold transferred on or after 23 July 2024 — the LTCG rate is a flat 12.5% without indexation.
Is inherited gold taxable? What is the tax treatment?
There is no tax on receiving gold through inheritance or gift from a relative (as defined under Section 56(2) of the Income-tax Act 2025). The cost of acquisition of inherited gold is the cost at which the previous owner acquired it (or FMV on 1 April 2001 if acquired before that date). The holding period includes the period for which the previous owner held it. When you eventually sell inherited gold, capital gains are computed on this stepped-up cost. Keep the original purchase invoices of the deceased owner.
How are Sovereign Gold Bonds taxed?
SGB taxation has three scenarios: (1) Redemption at maturity (8 years) — capital gains are completely EXEMPT from tax under Section 10(38A); interest received semi-annually is taxable as "Income from Other Sources" at slab rate. (2) Premature redemption through RBI window (after the 5th year) — LTCG applies at 12.5% (no indexation) from Budget 2024. (3) Transfer on stock exchange before maturity — if held more than 12 months, LTCG 12.5%; if held 12 months or less, STCG at slab rate. SGBs remain the most tax-efficient gold investment when held to maturity.
What is the tax difference between Gold ETF and physical gold?
Post Budget 2024: (1) Physical gold — LTCG after 24 months at 12.5% (no indexation). STCG at slab rate. (2) Gold ETF — LTCG after 12 months at 12.5%; STCG at slab rate. So Gold ETFs qualify for long-term treatment after just 12 months versus 24 months for physical gold. Additionally, Gold ETFs have no GST on purchase/sale (unlike physical gold at 3%), no storage costs, and no making charges. Gold ETFs are generally more tax-efficient for investors holding 1–8 years.
Can I claim Section 54F exemption on capital gains from gold sale to buy a house?
Yes. Section 54F exemption is available when you sell any long-term capital asset other than a residential house and invest the net sale consideration (not just the gain) in purchasing or constructing one residential house property in India. Physical gold and Gold ETFs are eligible long-term capital assets for this purpose. You must purchase the house within 1 year before or 2 years after the sale, or construct within 3 years. You must not own more than one residential house (other than the new one) at the time of sale.
Related Pages
◆ Available in 71 Cities
Tax On Gold Near You
Expert CA/CS assistance for tax on gold across India. Click your city for local details.
→
New Delhi
→
Mumbai
→
Bengaluru (Bangalore)
→
Hyderabad
→
Chennai
→
Kolkata
→
Pune
→
Ahmedabad
→
Noida (UP)
→
Gurgaon (Gurugram)
→
Jaipur
→
Lucknow
→
Chandigarh
→
Surat
→
Kochi (Cochin)
→
Faridabad
→
Ghaziabad
→
Greater Noida
→
Panipat
→
Sonipat
→
Manesar (IMT)
→
Dharuhera
→
Mathura
→
Palwal
→
Agra
→
Kosi Kalan
→
Aligarh
→
Khair
→
Jewar (Noida International Airport)
→
Kanpur
→
Varanasi (Kashi)
→
Prayagraj (Allahabad)
→
Meerut
→
Bareilly
→
Moradabad
→
Gorakhpur
→
Firozabad
→
Saharanpur
→
Muzaffarnagar
→
Bulandshahr
→
Hapur
→
Karnal
→
Kurukshetra
→
Ambala
→
Hisar
→
Rohtak
→
Yamunanagar
→
Rewari
→
Bhiwani
→
Jodhpur
→
Udaipur
→
Kota
→
Ajmer
→
Bikaner
→
Ludhiana
→
Amritsar
→
Jalandhar
→
Patiala
→
Mohali (SAS Nagar)
→
Bathinda
→
Dehradun
→
Haridwar
→
Rudrapur
→
Shimla
→
Solan (Baddi-Barotiwala-Nalagarh)
→
Bhopal
→
Indore
→
Gwalior
→
Jammu
→
Srinagar
→
Panchkula