What should you know about taxes on gold investment in India?

There are several gold investment options available, such as gold ornaments, coins, bullions, gold ETFs, SGBs, digital gold, and so on, and each investment has a different tax treatment. In general, when purchasing gold, the buyer must pay a GST of 3%. In case someone buys physical gold for more than 2 lakhs in cash, they have to deduct and deposit TDS @ 1%. --Income from the sale of gold comes under the heading of capital gains. Capital gains can be long-term or short-term. If a taxpayer sells any gold or investment related to gold after holding it for more than 3 years, it is considered a long-term capital gain (LTCG), whereas if the holding time is less than 3 years, it is considered a short-term capital gain (STCG). --In the context of gold mutual funds, gold ETFs, or digital gold, the person must pay income tax at slab rates on STCG and 20% on LTCG with indexation benefits. --Interest earned on SGBs is taxable at slab rates. But income on the sale of SGBs, on the maturity of 8 years, is exempted from tax. Whereas, income on the sale of SGB after 5 years but before 8 years is considered LTCG, and taxpayers have to pay 20% tax with the benefit of indexation. Income on sales of SGBs within 12 months is considered a short-term gain, and the tax is payable at slab rates.