If you have sold gold at a profit, you need to pay tax on the same. In case the amount of profit is high, it would be better to advance tax.
The advance tax liability is paid when the amount of tax liability is more than Rs 10,000 or more in a financial year. Senior citizens, who are 60 years or older, and do not run a business, need not pay advance tax.
How to pay advance tax on sale of gold?
It's important to pay advance tax when you sell gold. You can easily pay advance tax through your net banking. You need to login to https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
As soon as you are on this website, you would see four challans"
Select Challan 280
This challan is meant for payment of Advance tax, Self-Assessment tax, Tax on Regular Assessment, Surtax, Tax on Distributed Profits of Domestic Company and Tax on Distributed income to unit holders.
You can and should ignore the other challans, which are challan 281, 282, 283, which are used for other purposes and paying tax for other liabilities.
For example Challan 282 is sued for payment of Securities transaction tax, Estate duty, Wealth-tax, Gift-tax, Interest-tax, Expenditure/other tax, Hotel Receipt tax and Commodities transaction tax
Here you begin by selecting 0021, income tax other than companies and also select 100, which is advance tax payment.
Enter PAN / TAN (as applicable) and other mandatory challan details like accounting head under which payment is made, address of the tax payer and the bank through which payment is to be made etc.
Select the mode of payment you wish to choose. There are two modes of payment available net banking or Debit Card
Select relevant Assessment Year (AY). For the period 1st April 2020 - 31st March 2021 the relevant AY is 2021-22
Enter your complete address
Enter Captcha in the given space and click on 'Proceed'.
On confirmation of the data so entered, the taxpayer will be directed to the net-banking site of the bank.
The taxpayer has to login to the net-banking site with the user id/password provided by the bank for net-banking purpose and enter payment details at the bank site.
On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.
It's important that you preserve this counter foil as the advance tax payment made would help when filing your income tax for the said period as you would need the BSR code. The procedure to file advance tax when you sell gold is simple and if you gave sold gold at a hefty profit at the start of the financial year it is advisable to pay advance tax.
About the author
Sunil Fernandes has spent 27 years tracking and covering stock markets for frontline investment and leading business dailies, including Hindustan Times, Deccan Herald, Oman Economic Review, Gulf Times and Dalal Street Investment Journal. Sunil is currently the Managing Editor for GoodReturns.in, a top personal finance and business news website. His areas of expertise include stocks, commodities, forex, mutual funds, banking and tax planning.