ITR Filing New Deadline On September 15; Do You Have To Pay Taxes On Gold Jewellery, Bullion Gifts In Wedding

ITR Filing: In major good news, the Income Tax Department has extended the deadline to file ITR returns for the financial year 2024-25 to September 15 from its earlier due date of July 31. This comes as a relief during wedding season when demand for gold jewelry, gold coins and other bullion is high. But do you have to pay taxes if you receive gifts in the form of gold, jewellery, coins or bullion?

Tax Rates On Gold Jewellery, Bullions, Gold ETFs, SGBs, and Gold Mutual Funds:

Gold will be expensive in 2025, as prices of yellow metal across its carats surge sharply. Gold rates are likely up by 20% to 26% YTD. However, India is a believer in precious metals because of the traditional and cultural essence it holds. But that is not all gold and silver are also one of the long-term wealth-creating investment mechanism for Indian investors.

Gold demand is high during festival and wedding season in India. Currently, wedding bells are ringing in many regions of India. Hence, gifts in the form of gold jewellery and other bullion are common.

As per the IT ACT rule, if the value of gifts in the form of gold coins, gold jewellery, bullion, ETFs or mutual funds exceeds Rs 50,000, then they fall under the taxable category called 'Income From Other Sources'.

Income from other sources means gains made apart from monthly salary. However, the government of India does offer certain tax exemptions on these gifts.

1. If the gold jewellery or bullion gift value is below or up to Rs 50,000, they are tax-free.

2. Also, if these gifts are received from relatives such as Spouse; Brother or sister; Parents; Friends; Lineal ascendant or descendant of you or your spouse; and any asset received as inheritance under a will or any law of succession applicable to you --- then they are exempted from income tax rates.

However, there are certain short-term and long-term tax rates applicable on the sale of physical or digital gold such as ETFs or mutual funds.

Physical Gold, Digital Gold Tax Rates:

If you sell physical gold within three years of purchasing it, a Short-Term Capital Gains (STCG) tax will be assessed. The STCG will be taxed at the income tax slab rate and added to the total taxable income. If you sell physical or digital gold after three years, a long-term Capital Gains Tax will be payable at a 20% + Cess and fee rate. It is important to note here that the STCG tax is not levied in the case of digital gold, as per Kotak Life's explainer.

Also, there is a daily cap of Rs 2 lakh for buying digital gold. If digital gold is held for more than 3 years, they are liable for a 20% tax rate as LTCG. There are no short-term capital gains tax for selling digital gold in less than 3 years.

Sovereign Gold Bonds (SGBs):

Noteworthily, sovereign gold bonds (SGBs) are exempted from taxes if they are held for a period of 8 years or more. But the interest earned on this scheme is liable for taxes.

The purchase of SGBs does not involve outward costs, as GST is not required. An SGB receives interest at 2.5% annually, added to taxable income, and assessed according to the applicable slab. However, after eight years, SGB profits are tax-free, Kotak's website added.

Gold ETFs And Mutual Funds Tax Rates:

LTCG of 20% plus 4% cess is applicable on both gold exchange-traded funds (ETFs) and mutual funds. They also fall under the income from other sources category.

"Gold, often hailed as a symbol of wealth and prosperity, is significant in the financial world. As individuals buy, sell, and exchange gold for various purposes, understanding how gold is taxed is crucial for making informed financial decisions," said Kotak's note.

ITR Filing Deadline Extended:

In view of the extensive changes introduced in the notified Income Tax Returns (ITRs) and considering the time required for system readiness and rollout of ITR utilities for Assessment Year (AY) 2025-26, the Central Board of Direct Taxes (CBDT) has decided to extend the due date for filing returns, the department said on May 27th.

Accordingly, to facilitate a smooth and convenient filing experience for taxpayers, it has been decided that the due date for filing of ITRs, originally due on 31st July, 2025, is extended to 15th September, 2025.

In a statement, CBDT said, "This extension is expected to mitigate the concerns raised by stakeholders and provide adequate time for compliance, thereby ensuring the integrity and accuracy of the return filing process."