1 week ago

Buying New Gold Does Not Automatically Erase Old Gold Tax

Sold old gold jewellery? Can buying new gold using the proceeds help you save tax — here’s what the law says · livemint.com

Selling old gold jewellery can result in a tax bill if you make a profit.

The tax is based on your profit, not the entire amount you receive.

Buying or exchanging the old jewellery for new jewellery does not automatically cancel the tax.

The old jewellery sale and the new jewellery purchase are treated as separate transactions.

If you owned the gold for more than 24 months, the profit is generally treated as a long-term capital gain and taxed at 12.50%.

If you owned it for 24 months or less, the gain is taxed according to your income-tax slab.

Inherited or gifted jewellery may use the previous owner’s cost and holding period.

Tax relief may be available if qualifying sale proceeds are used to buy a residential house under Section 54F.

Key facts

Taxable amount: Tax applies to the capital gain or profit, rather than the full selling price.
Personal-use jewellery: Jewellery is excluded from personal effects for tax purposes, so gains may be taxed even when it was personally used.
Long-term threshold: Jewellery held for more than 24 months is treated as a long-term capital asset.
Long-term tax rate: Long-term capital gains are taxed at 12.50%, without applying the cost inflation index.
Short-term tax rate: Jewellery held for 24 months or less produces short-term gains taxed at the applicable slab rate.
Inherited or gifted jewellery: The previous owner’s acquisition cost and holding period may be considered.
Potential exemption: Section 54F may provide an exemption when the sale consideration is invested in a residential house within the specified period.

livemint.com · 1 week ago