Indians have a strong affinity for gold. They predominantly purchase gold jewelry for festivals, weddings, and other auspicious occasions.
Gold is often passed down through generations as inheritance, either through legal means or as gifts from parents to their descendants. Let’s explore the tax regulations surrounding this gold.
There is a massive demand for gold in our country. India is the second-largest consumer of gold after China. Buying and wearing gold jewelry is a tradition and custom, especially during festivals and auspicious occasions.
Gold is a significant part of our culture and traditions. It is believed that buying gold on auspicious days brings good luck.
Women adorn themselves with gold jewelry, not just as decoration but also as a symbol of prosperity. The high value of gold is also attributed to its perceived utility in times of crisis and danger.
Gold is not just a commodity but a part of our family traditions. From the common middle class to the affluent, everyone aspires to own gold.
The gold and silver ornaments accumulated over the years are investments and a part of our family’s wealth. These are often passed down to the next generation as gifts, especially during marriages and other auspicious events.
In our country, parents give as much gold as they want, especially during their daughters’ marriages. Many people have doubts about this, especially regarding tax rules.
There is often confusion about the tax implications of selling gold gifts. Many believe that no tax is applicable in such cases. However, it’s essential to understand the actual rules to avoid any surprises. Let’s delve into the tax rules regarding the sale of gold gifts.
A prominent tax expert has revealed that many people think there is no need to pay any tax to impose a tax on the money received from the sale of gold jewelry.
However, in a financial year, if the value of gifts from everyone exceeds Rs. 50,000, it must be taxed under income from other sources. However, there are some exceptions to these rules.
Gifts from parents are different from those from relatives. If the gift is from parents, it does not come under these tax rules. It is not considered as your income.
However, experts said that even though the value of the jewelry is not considered income when receiving the gifts, if the jewelry is sold, the capital gains tax will have to be paid.
If the combined holding period is 24 months, it is considered short-term capital gains. If the holding is more than 24 months, the capital gains will be treated as long-term capital gains tax and taxed at 12.5 percent.