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Gold Tax in India 2025- What are the tax implications for Physical Gold, Gold ETFs, Gold Mutual Funds, and Sovereign Gold Bonds?
Gold has historically been a fundamental element of investment portfolios in India, valued for both its cultural importance and its function as a safeguard against economic fluctuations. The Union Budget of 2024 has brought significant alterations to the taxation structure related to gold investments, affecting multiple formats including physical gold, Gold ETFs, Gold Mutual Funds, and Sovereign Gold Bonds (SGBs). This article explores these modifications and clarifies their consequences for investors.
Gold Tax in India 2025: How Much Are You Really Paying?
It is essential to grasp the distinctions between long-term and short-term as defined by the newly proposed tax regulations before we move forward. This understanding is crucial, as the taxation rules are contingent upon these definitions.
A. Listed Securities
The long-term means a 12-month holding period or 1 year. Below are securities that fall under this category.
- Stocks
- Equity Mutual Funds
- Equity ETFs
- Gold ETFs
- Bond ETFs
- Listed Bonds
- REITs
- InVIT
- Sovereign Gold Bonds (SGB)
Equity mutual funds, while not traded on stock exchanges like stocks and ETFs, are still classified as listed securities for taxation purposes.
B. Unlisted Securities
The long-term means a 24-month holding period or 2 years. Below are securities or assets that fall under this category.
- Real Estate
- Physical Gold
- Gold Mutual Funds
- Unlisted Stocks (Indian or Abroad)
- Debt Mutual Funds (Units bought before 1st April 2023)
- Foreign Equity Funds
C. Neither Long Term or Short Term
These are certain instruments that neither qualifies for listed nor unlisted. These assets are taxed as per the tax slab (irrespective of your holding period). They will be taxed as per your tax slab. Below are certain such products.
- Debt Mutual Funds (Units bought after 1st April 2023)
- Market Linked Debentures
- Unlisted Bonds or Debentures
The aforementioned changes will take effect in the future. If you have sold an asset before July 23, 2024, and have reported short-term or long-term capital gains, the old tax rates will apply. The revised tax rates will be relevant for asset sales occurring on or after July 23, 2024.
We will now examine the table below that outlines the changes in gold taxation in India following the 2024 budget. It is evident that the primary beneficiaries of this adjustment are Gold ETFs and Gold Mutual Funds. Previously, these investments were subject to taxation based on the applicable tax slab. However, under the new regulations, if held for more than 12 months or 24 months, the tax rate is reduced to a flat 12.5%.
| Gold Tax in India | ||||||
| Assets | Before 23rd July 2024 Taxation | New Taxation on or after 23rd July 2024 | ||||
| LTCG Eligibility | LTCG Tax | STCG Tax | LTCG Eligibility | LTCG Tax | STCG Tax | |
| Physical Gold | 24 Months | 20% with Indexation | As Per Slab | 24 Months | 12.50% | As Per Slab |
| Gold ETF (Bought before 1st April 2023) | 36 Months | 20% with Indexation | As Per Slab | 12 Months | 12.50% | As Per Slab |
| Gold ETF (Bought after 1st April 2023) | NA | As Per Slab | As Per Slab | 12 Months | 12.50% | As Per Slab |
| Gold Mutual Funds (Bought before 1st April 2023) | 36 Months | 20% with Indexation | As Per Slab | 24 Months | 12.50% | As Per Slab |
| Gold Mutual Funds (Bought after 1st April 2023) | NA | As Per Slab | As Per Slab | 24 Months | 12.50% | As Per Slab |
| Sovereign Gold Bonds (SGB) (When you sell in a secondary market). If you hold till maturity, then its tax-free. | 36 Months | 20% with Indexation | As Per Slab | 12 Months | 12.50% | Sovereign Gold Bonds (SGB) (When you sell in a secondary market). If you hold till maturity, then its tax free. |
Hope this above table will give you clarity on gold tax in India. Let me know if you have any questions or doubts.
