Home / Business and Economy / Gold ETFs: Taxable Gains on Every Sale
Gold ETFs: Taxable Gains on Every Sale
18 Nov
Summary
- Gold and silver ETFs incur capital gains tax on all sales.
- Short-term ETF holdings are taxed at the investor's slab rate.
- Long-term ETF gains are taxed at 12.5% without indexation.
Investors holding gold and silver Exchange Traded Funds (ETFs) should be aware that all sales of these assets are subject to capital gains tax. Unlike some other investments, these ETFs do not qualify for any tax exemptions, making every transaction taxable regardless of the holding period.
For short-term investments, units held for a maximum of 12 months will be taxed at the individual investor's applicable income tax slab rate. This means the tax burden can vary significantly based on an individual's overall income.
When units are held for longer than 12 months, a long-term capital gains tax applies. This tax is set at a rate of 12.5%, and it is calculated without the benefit of indexation, which typically adjusts for inflation.
