Kaam Ki Baat : Income tax payment has to be done in different ways on all the four ways of investing in gold, know how much tax will be charged
The Income Tax Department has extended the last date for filing ITR for 2020-21 to December 31, 2021. While filing returns, you have to give all the information from your earnings to investments. If you have invested in gold, then the same has to be disclosed at the time of filing ITR.
Experts say that the taxpayer has to pay tax depending on the mode of investment in gold. Those investing in gold through gold bonds will have a different tax liability than those who buy physical gold. If you are going to file the return then don't forget to enter your gold holding for 2020-21 till December end.
Physical Gold...Taxed as per Capital Gain
Slab-based short-term capital gains tax is levied on selling it within 36 months of investing in physical gold. The return from the sale of gold is added to the annual earnings of the investor.
If gold is sold after three years, it will be treated as a long-term capital gain. The tax will be determined on the basis of the sale proceeds. A tax of 20 percent of the total assessment will have to be paid on this. Apart from this, 4% of the amount of tax is also levied.
There is no direct tax on holding digital gold for less than 36 months
Digital gold... will have to pay 20 percent tax
Digital gold is a new way of investing in gold, which is becoming increasingly popular. Investment in this is possible through different wallets and bank apps. One can invest in Digital Gold with a minimum of Rs. It attracts 20 percent tax on returns along with cess and surcharge of 4 percent on long-term capital gains. Returns for holding digital gold for less than 36 months are not directly taxed.
Cess will also have to be paid along with gold ETF...
One can also invest in gold through Gold Mutual Funds and Gold Exchange Traded Funds (ETFs). In this, gold is in virtual form and not in physical form. Both are taxed at the same rate as physical gold. Investing in gold through gold mutual funds or ETFs attracts 20 percent tax along with 4 percent cess for long-term capital gains.
Sovereign Gold Bond... Taxes to be paid as per slab
Investors on Sovereign Gold Bonds (SGBs) get 2.5 percent interest annually, which is taxed as per the slab.
After 8 years of investing in SGB, the investor's returns will be completely tax-free.
If the holding is sold after 5 years and at any time before reaching maturity, 20 percent Long Term Capital Gains Tax and 4 percent Cess is also levied.
Include SGB interest in the income
Tax and investment advisor Sweety Jain says that 'investing in gold is considered safe. Interest earned from Sovereign Gold Bonds is also taxable. Include that in your income too.