Tax on Gold and Silver Profits in India: Indian investors trust gold and silver as a safe haven investment; however, this does not render profit realized upon sale tax-free. The tax treatment depends on the number of years the asset is held and in which form it is owned-whether physical, digital, or through ETFs (Exchange-traded Funds).

Tax on Gold and Silver Profits in India:

If gold or silver is sold within three years from the date of purchase, then the profits would be termed short-term capital gains (STCG). Such gains are added to total income, which is then taxed as per his applicable income taxation slab. On the other hand, if these metals are held for more than 36 months, their profit would be classified as long-term capital gains (LTCG), being taxed at a lower rate of 20 percent along with the benefits of indexation.

Tax on Digital Gold and ETFs
Digital gold and gold ETFs are taxed in the same way as physical gold. The same rule for short term capital gains (STCG) and long term capital gains (LTCG) applies. For paperless investments, notwithstanding the fact that such kind of investments offers liquidity and convenience through ETFs, they are still taxed as if they were physically held.

TDS and GST Effects
So far, there is no TDS on individuals who sell gold or silver, and at very present, there is 3% GST from the buyers for gold jewelry or articles of silver. For the traders or businesspersons who deal with precious metals in bullion, the income from sales is treated as business income and is taxed at the regular income slabs.

Also Read: Gold Rate Today Falls By ₹1000? Silver Also Down Sharply

As ever, it is important to maintain accurate documentation of purchase and sale transaction activity complete with invoices to avoid discrepancies in reporting at tax time. Any capital gain arising from gold or silver transactions must be reported in the Capital Gains section in the Income Tax Return (ITR).

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