Gold is now making relentless rally and is now up for the night straight day with a record high hit again in the futures market of Rs. 52846 per 10 gm and if you given the Covid 19 led financial crunch have made your mood to sell some of your old gold valuables, the time can be just right, providing you with ready and substantial cash.
But selling gold doesn't come easy and here is how you should go about it:
Documents you need while selling gold
Purchase bill of your gold if at all it is there
Undertaking that the gold belongs to you so as to avoid any chance of selling of stolen gold
In an ideal scenario, if you are engaging in selling gold, you may at best choose the same jeweler from where the jewellery was purchased and in a case when inherited or gifted jewellery is being sold and you don't know the place from where it was bought or the place is not accessible, go for the reputed jeweler in town to get a fair deal.
"You can get gold ornaments, coins, and bars bought from other jewellers as well. A hallmark certificate will be better, but even if you don't have it, there are machines/processes in place to check the purity of gold", said Aditya Pethe, director, Waman Hari Pethe Jewellers.
Also, in a case if you plan to take a price difference of 3-4% due to some gap as in hallmarking or lack of purchase will, it can be a somewhat risky bet though.
For the purity aspect
In case there is apprehension on the purity aspect, you also can get it done at such designated centres in big cities and to get the best price you might approach several jewellers for the purpose. Also, there are some companies including gold loan companies as well as NBFCs that offer doorstep services for the purpose.
Taxation of physical or non-physical gold in case of sale
On selling physical gold, there is levied short term capital gains tax if held for less than 1 year, and here the entire gain made is added to your income and taxed as per your slab. And for gold held for over 3 years, LTCG will be taxed at 20% after indexation. Even for all other modes of gold investment such as ETFs and digital gold, there is similar tax treatment except that in case of SGBs.
In case of SGBs, interest income is charged under the head income from other sources, with no TDS or TCS implication. However there is no capital gains tax levied on redemption of SGBs after maturity.