Gold at ₹1,00,000: Selling Gold? Understand Tax Rules Before and After FY 2025

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Gold at ₹1,00,000: Selling Gold? Understand Tax Rules Before and After FY 2025 


As gold prices reach an unprecedented ₹1,00,000 per 10 grams, many investors and households are evaluating the right time to liquidate their holdings. Whether it’s jewellery, bars, or digital gold, understanding the capital gains tax implications is critical—especially with significant tax changes taking effect from FY 2025–26.

This guide outlines how gold gains are taxed under current rules and what changes are expected from April 1, 2025. It also includes practical tax-saving tips and considerations for non-resident Indians (NRIs).

Capital Gains Tax on Gold: A Comparison Between FY 2024–25 and FY 2025–26

1. Taxation in FY 2024–25 (Up to March 31, 2025)

  • Short-Term Capital Gains (STCG):
    Applicable if gold is held for less than 36 months. Gains are added to your total income and taxed as per your individual tax slab.

  • Long-Term Capital Gains (LTCG):
    If gold is held for more than 36 months, LTCG is taxed at 20% with indexation benefit.

2. Taxation in FY 2025–26 (Effective April 1, 2025)

As per amendments announced in the Union Budget 2024:

  • LTCG holding period is reduced to 24 months

  • Gains are taxed at a flat 12.5%

  • Indexation benefit has been removed

This change applies to all forms of gold: physical, ETFs, and sovereign gold bonds (on sale before maturity, if applicable).

Practical Example: Impact of Indexation

Sale in FY 2024–25 (With Indexation)

  • Purchase Price (2018): ₹50,000

  • Sale Price (2025): ₹1,00,000

  • CII: 2018–19 = 280, 2024–25 = 348

  • Indexed Cost = ₹50,000 × (348/280) = ₹62,143

  • LTCG = ₹37,857

  • Tax @ 20% = ₹7,571

Sale in FY 2025–26 (Without Indexation)

  • Purchase Price: ₹50,000

  • Sale Price: ₹1,00,000

  • No indexation allowed

  • LTCG = ₹50,000

  • Tax @ 12.5% = ₹6,250

While the nominal tax rate is lower in FY 2025–26, the removal of indexation may lead to higher effective tax for long-term holders, especially if the purchase was made many years ago.

Gold Acquired Before April 1, 2001

For legacy holdings, sellers can continue to consider the Fair Market Value (FMV) as of April 1, 2001 as the cost of acquisition. However:

  • Indexation benefit on FMV will only apply if the sale occurs before March 31, 2025

  • From FY 2025–26 onward, FMV remains valid, but no indexation will be allowed

Tax Planning Tip: Set Off Capital Gains with Capital Losses

Capital gains from gold can be adjusted against capital losses from equity or other assets, subject to certain conditions:

  • Short-Term Capital Loss (STCL): Can be set off against both STCG and LTCG.

  • Long-Term Capital Loss (LTCL): Can only be set off against LTCG.

Example:
If an investor incurs a ₹1,00,000 LTCG from gold and has ₹50,000 in LTCL from equity shares, the net taxable gain becomes ₹50,000, reducing tax liability accordingly.

Losses can also be carried forward for 8 years if declared in a timely filed return.

NRI Considerations When Selling Gold in India

Tax Deduction at Source (TDS)

  • For NRIs, TDS at 20% is applicable on LTCG (under the old regime).

  • With the new flat tax rate of 12.5% from FY 2025–26, TDS may also be revised accordingly (subject to clarification from CBDT).

Double Taxation Avoidance Agreement (DTAA)

NRIs can claim credit in their country of residence for tax paid in India, provided there is a valid DTAA in place. Proper documentation and tax residency certificates are necessary to claim relief.

Repatriation Rules

  • Proceeds from the sale of gold can be repatriated under RBI guidelines, subject to relevant documentation (purchase proof, ownership trail, bank transfers).

  • NRIs must file an Indian tax return to claim refunds or carry forward losses, even if TDS has already been deducted.

Summary Table: 

Comparison Between FY 2024–25 and FY 2025–26

AspectFY 2024–25FY 2025–26
LTCG Holding Period>36 months>24 months
LTCG Tax Rate20% (with indexation)12.5% (no indexation)
Indexation BenefitAvailableNot available
TDS for NRIs20% (with potential refund)Likely 12.5%
Best for Long-Term HoldersYesSuitable for shorter holding terms

Conclusion: When Should You Sell?

  • If you purchased gold several years ago, it may be more tax-efficient to sell before March 31, 2025, while indexation is still allowed.

  • If your holding period is between 2 to 3 years, the 12.5% flat tax in FY 2025–26 may offer marginal relief.

Before taking any decision, consult a qualified tax advisor to evaluate your specific scenario, especially if large sums or international transactions are involved.


🚀 Need assistance in financial planning, tax compliance, or business strategy? Connect with experts today!


Team Eaztaxbiz

Write us : ca@eaztaxbiz.com

Reach us : +91-9921010284

www.eaztaxbiz.com

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