Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Short-term versus long-term
Physical gold and jewellery are capital assets with a 24-month holding line. Sell after more than 24 months and the gain is long-term at 12.5% plus cess (from 23 July 2024); sell within 24 months and it is short-term, added to income and taxed at your slab rate. Rates and holding periods change — confirm per the Finance Act.
Cost and proof
Your gain is the sale price minus the cost of acquisition — the purchase invoice, or for inherited/old jewellery, the previous owner’s cost (or its 1 April 2001 value). Keep purchase bills; without them, establishing cost is hard and the taxable gain can be overstated. Making charges form part of the cost.
A worked example
Example: you sell gold jewellery for ₹8 lakh that you bought for ₹3 lakh five years ago — a long-term gain of ₹5 lakh, taxed at 12.5% (about ₹62,500). Bought eight months ago, the ₹5 lakh would be added to income at your slab. You can shelter a long-term gain by reinvesting in a house under Section 54F. Our team can compute and plan it.