Gold has traditionally been the choice of Indians. Akshay III has also been close. In such a situation, if you are planning to buy or invest in gold, then you should assess other types of tax including Goods and Services Tax (GST). Otherwise, buying gold can prove to be an expensive deal for you. Apart from GST on gold, capital gains tax (Capital Gain Tax) is also to be paid, with rates up to 20.80 per cent.
GST on new jewelery
The price of gold varies according to the weight and carat of the jewelery in the market. But, on buying gold jewelery, there is a GST of three per cent on its price. You will also pay jewelery in any mode ie cash or digital mode, you will have to pay three percent GST.
More GST on making charge of jewelery
GST on gold and GST on gold making charge are different. There is a five per cent GST rate on the making charge of gold jewelery. So while buying gold jewelry, keep in mind that you get a separate GST on gold jewelry and a separate GST on gold making charge. If the jewelers do not do this, you can also file a complaint.
This is how old jewelery is assessed
If you are thinking that you will not buy any new jewelery, but by making a little more gold in the old jewelery and make it heavier, then you will still be taxed. In this way, GST is also levied on the reconstruction of old gold jewelery, the rate of which is 18 per cent.
When is tax levied on selling
Probably very few people will know that apart from buying gold, selling gold is also taxed. This happens mostly in the case of Nivsh. While selling, it is seen how long you have been in jewelery because, according to that period, tax will be applied on it. Short-term capital gains tax (STCG) and long-term capital gains tax (LTCG) are to be paid on gold by duration.
How much does capital gain tax
STCG will be levied on gold when you sell it within three years from the date of investment. According to STCG rules, the income tax slab will be deducted according to the income you have earned on selling it. If sold after three years or more, LTCG will have to pay tax at the rate of 20.80 per cent.
Tax on digital gold too
Gold exchange traded funds (ETFs) and e-gold fall into the category of digital gold. There is a fee to be paid for buying e-gold. In e-gold, companies are also giving an option to give gold equal to the investment amount. In such a situation, three percent GST will have to be paid on e-gold too. However, this will only happen when you want to take gold. The ETF is a mutual fund scheme. It takes an acceleration ratio of 0.90 to 1.36 percent.
Only bond is tax free
Gold bonds are issued by the Reserve Bank on behalf of the government. It has an investment facility equal to the value of one gram of gold and also gets interest of 2.50 per cent per annum. There is also a facility to withdraw investment after five years while the maturity period is eight years. Capital gains tax (Capital Gain Tax) is not levied on profits from gold bonds after completion of the maturity period. There is also a discount of 50 rupees per gram on digital payment. You can sell it in the stock market anytime. It also does not attract GST and does not deduct TDS on investment. Also, there is a facility to use as a guarantee for taking a loan. Gold bond is considered equivalent to 999 purity gold.
