Gold Prices India; Biggest Jump In 24-Carat In 55 Days; Know Tax Rates On Profits On Phsyical Gold

Gold prices witnessed a sharp rebound on April 24, being back to the bays of bulls. After, two consecutive monthly falls in January and February, gold prices are shining more than ever. 24-carat gold in 10-gram is up more than Rs 9,400 in just 55 days since last month. While gold is moving great, and investors have made massive gains, but have you wondered what will happen to the income you book on physical gold after the rally?

In simple words, income on physical gold is taxable!

Gold Prices India:

Currently, as of April 24, 2024, gold prices of 10-gram at Rs 66,150 for 22-carat, Rs 72,650 for 24-carat and Rs 54,490 for 18-carat.

The reason why gold prices started rallying starting March month is because of the hopes of early-than-expected rate cuts from the US Fed, which was the cherry on top of the geopolitical tensions in the Middle East. Gold in April so far has been fuelled for buying due to the Israel and Iran conflict. All eyes are on the Middle East, and its impact on economies globally, which brings support to safe havens like gold.

So far, in April, 24-carat and 22-carat gold is up by 5%, while the surge was even greater by 8.4% in March 2024. This is compared to a 1% drop each in February and January month.

January 2024: Gold fell by Rs 600 to end the month at Rs 63,270 in 24-carat 10 gram, compared to Rs 63,870 at the start of the same month.

February 2024: In this month, 24-carat gold dipped by Rs 610 in 10 grams to Rs 62,830 as of February 29, compared to Rs 63,440 as of February 1.

March 2024: It was the third month of 2024 when gold prices gained massive traction as Middle East tension continued to escalate. The 24-carat of 10 grams in March 2024 surged by as much as Rs 5,290 to Rs 68,450 as of March 31, 2024, compared to the price of Rs 63,160 on March 1, 2024.

April 1-24: In a little over three weeks of April, gold prices have already achieved more than 60% of the gains that they witnessed in March. 10-gram of 24-carat is up by Rs 3,270 in 24 days so far, compared to the Rs 69,380 price level on April 1. This carat in 10 grams is currently at Rs 72,650.

That being said, the gold price of 10-gram in 24-carat is up by Rs 9,490 in 55 days so far, the biggest gains of year-to-date.

So how much tax rate is levied when you book your income in physical gold.?

It needs to be noted that any physical form of gold such as jewellery, ornaments, coins, biscuits, etc. is income from other sources, and falls under the income tax brackets.

There are long-term and short-term capital gains aka LTCG and STCG tax rates on income from physical gold.

Firstly, there is a GST of 3% on the purchase of gold, and a 5% rate is applied on making charges. In case, you're exchanging two forms of gold, for instance, a gold coin for physical jewellery, then there will be no GST levied as long as the weight of the gold are same, but GST will be there if the weight surpasses.

Notably, there is no GST on the sale of physical gold. But...

As per the Income Tax rule, if an investor is selling their gold before a 3-year period from the purchase, then the gains arising from the sale are considered STCG. But if the physical gold is sold after three years of purchase, then it falls under the bracket of LTCG.

As per the Tax2win website, the LTCG gets taxed at 20.8% (20% plus a cess of 4%). Indexation benefit of the purchase cost is available (to cover inflation cost from year of purchase to year of sale). While the STCG gets added to your income and is taxed based on individual slab rates under the Act.

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