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Have You Sold Gold? Here’s Why You Should Show It In Your Tax Returns


Gold in any form is liable to capital gains tax or capital gains losses and must be mentioned in the income tax returns. Often folks might be tempted to sell broken gold jewellery, which has been there for many years and may forget to mention the profit on the same. It does not matter when it was bought or what kind of gold product or instrument, one has to pay capital gains tax if there is a profit.


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Also, it does not matter if a person has bought gold coins, gold jewellery, gold bars or paper form of gold including Gold ETFs.

Even if you have incurred a loss it's appropriate to mention the same in your tax returns.

Tax on gold coins and gold jewellery

Tax on gold coins and gold jewellery

Often we have gold jewellery that is old and we tend to encash the same. We must accordingly calculate the profit or loss on the same and offer the same for tax purposes.

If you have sold gold coins, gold bars or gold jewellery, within a period of 36 months, than short term capital gains shall apply. The profits would be added to the total income and tax would apply as per the income tax slabs.

On the other hand, if you have sold gold jewellery or gold coins after a period of 36 months, than capital gains tax would apply at 20.8 per cent, plus indexation benefit.

Even if you have showed losses, it is prudent to show the same.

Tax applicable on gold ETFs

Tax applicable on gold ETFs

Gold Exchange Traded Funds (ETFs) have also become extremely popular these days. The capital gains tax on Gold ETFs is not very different from that of physical gold. So, this form of gold including sovereign gold bonds would be taxed in the same manner as physical gold.

The long term capital gains would be 20.8 per cent including cess and could be lower taking into account indexation. Long term would mean sale of gold after a period of 36 months from the purchase.

In case, you have bought and sold gold before a period of 36 months, than the profit would be added to your total income and you would be taxed as per your tax bracket.

It's important that you also mention the loss just in case there is one.



Over the last 1 year, gold has given phenomenal returns as an asset class. In fact, we have seen the precious metal generate returns as high as 40 per cent. It is only appropriate that we offer the profits to tax.

Sometimes, individuals many not be aware that there is a capital gains tax to be paid. They just tend to sell the unwanted gold or exchange them for new jewellery. One has to be prudent to offer the same for tax purposes.

About the author:

About the author:

Sunil Fernandes has spent 26 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His forte remains stocks, commodities, debt, mutual funds and tax planning. Sunil is currently Managing Editor for

Read more about: gold investment tax
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