If you sell gold and reinvest all of the proceeds from the sale in buying or building a home, the capital gains you earn are allowed as a tax exemption. You can apply for a tax exemption on long-term capital gains derived from the sale of gold assets under section 54F of the 1961 IT Act. Buying gold is not taxable in India. In the case of both inherited gold and gold received as a gift, to determine whether the LTCG or the STCG will apply, the original owner's retention period will also be taken into account.
For more information on how to go about a Gold IRA rollover, check out our comprehensive Gold IRA rollover guide. The only exception to this is the case of gold traders who transact with gold as part of their business, where the profits of those transactions are taxed under the heading “Income from businesses or professions”. The income tax on gold in digital form is similar to that applied to the physical form of gold or to gold ETFs or to gold mutual funds. The purchase cost in the case of inherited gold or physical gold received as a gift is the cost of acquiring the parent or relative from whom it was inherited. There are no taxes if you inherit gold or receive gold as a gift from blood relatives, but when you sell it, you are required to pay capital gains tax if you make a profit.
And since gold is an investment asset, when you sell your gold and make a profit, it's taxed as capital gains. In the case of gold inherited or received as a gift, the purchase cost would be the cost price paid by the person from whom the gold is inherited. The taxes imposed on gold mutual funds and gold ETFs at the time of repayment are the same as those on the sale of gold jewelry. Capital gains from the sale of gold will be short or long term, depending on the period of time during which gold has been held.