Gold taxation explained: Physical gold, ETF, SGB or inherited gold - Where do you pay more tax?
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Buying physical gold?
Buying physical gold, jewellery or digital gold attracts 3% GST, and jewellery buyers also pay 5% GST on making charges, increasing overall cost. Gold ETFs and Sovereign Gold Bonds do not attract GST at purchase, making them more tax-efficient at entry.
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Selling physical or digital gold
If you sell physical or digital gold within 24 months, gains are taxed as short-term capital gains at your income tax slab rate. If held for more than two years, gains qualify as long-term capital gains taxed at 12.5% without indexation.
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Gold ETFs
For Gold ETFs, the long-term holding period is 12 months, which is shorter than physical gold. Units held over a year are taxed at 12.5% LTCG, while those sold earlier are taxed at slab rates as short-term gains.
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Sovereign Gold Bonds after Budget 2026
Interest earned on Sovereign Gold Bonds is taxable at your slab rate. Capital gains at maturity are tax-free only if you subscribed in the primary issue and hold till maturity, while secondary market buyers or early sellers must pay capital gains tax.
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Inherited or gifted gold
There is no inheritance tax when you receive gold through a will, but capital gains tax applies when you sell it. The tax calculation is based on the original owner’s purchase date and cost, and gifts above Rs 50,000 from non-relatives may also be taxable.
(Text: ET Wealth Edition Feb 16, 2026 - Feb 22, 2026)
(Text: ET Wealth Edition Feb 16, 2026 - Feb 22, 2026)