Tax on Selling Gold in India: Capital Gains Explained

When you sell physical gold in India, including jewellery, coins and bars, the profit is a capital gain. If you held it for more than 24 months, it is a long-term gain taxed at 12.5% without indexation. If you held it for 24 months or less, the gain is added to your income and taxed at your slab rate. These rules apply to sales on or after 23 July 2024.

The tax is on the gain, not on the whole sale amount. So the key numbers are what you paid, what you received and how long you held the gold.

The two rules in one table

Surcharge and cess may apply on top, as with other income. Indexation, which used to raise your purchase cost for inflation, is no longer available for gold sold after the 2024 change. Tax rules can be revised in any budget, so confirm the current position with a tax adviser before a large sale.

How to calculate your gain, step by step

1. Find the cost of acquisition. This is what you paid, as shown on your purchase invoice, including the gold value and charges billed with it.
2. Find the sale consideration. This is the amount the buyer pays you, as shown on their purchase bill or receipt.
3. Subtract any selling expenses directly linked to the sale, if documented.
4. Work out the holding period from the purchase date to the sale date.
5. Apply the right rate: 12.5% for long-term, slab rate for short-term.

Before you sell, it helps to know the current gold value of what you hold. Enter the weight and karat into the calculator below to see today's figure in rupees and dirhams.

The calculator shows the gold value at Dubai rates; a buyer in India will price off the domestic rate and deduct their margin. You can also open it full-screen on our gold price calculator page, and our walk-through of the calculator explains each field.

Selling old jewellery after six years

Sunita bought a 22K necklace for ₹2,40,000 six years ago, including making charges and tax, and has the invoice. She now sells it to a jeweller for ₹3,90,000. The figures are illustrative.

• Holding period: six years, so long-term.
• Gain: ₹3,90,000 − ₹2,40,000 = ₹1,50,000.
• Tax at 12.5%: ₹18,750, plus cess.

Notice that the making charges she paid count in her cost, even though the jeweller paid her only for the gold. That reduces her taxable gain.

Selling coins after 18 months

Aditya, in the 30% slab, bought 50 g of 24K coins for ₹3,50,000 and sells them 18 months later for ₹3,90,000.

• Holding period: 18 months, so short-term.
• Gain: ₹40,000.
• Tax at his 30% slab: ₹12,000, plus cess.

Had he waited past 24 months and sold at the same price, the tax would have been ₹5,000 at 12.5%. Timing a sale just after the 24-month mark can matter when the gain is large.

Selling gold you bought in Dubai

Gold bought abroad is taxed the same way when sold in India. Your cost is what you paid, converted into rupees. If you paid Indian customs duty to bring it in, keep that receipt too and ask your adviser whether it can be included in cost.

Say Imran bought a 20 g 24K bar in Dubai for AED 6,000 when 1 AED was worth ₹22.80, paying ₹1,36,800 in effect. Three years later he sells it in Mumbai for ₹1,85,000. His long-term gain is about ₹48,200 and tax at 12.5% is about ₹6,025, plus cess. Without the Dubai invoice, proving that cost would be difficult. Our guide on reselling Dubai gold in India covers testing and pricing at the counter.

What if you have no purchase invoice?

This is common with old family jewellery. Without proof of cost, you may struggle to justify any cost figure, which could mean a much larger taxable gain. Gather whatever you can: old bills, bank or card statements, wedding records or a valuation report. Our guide on why your gold invoice matters explains what to keep from now on.

Exchanging old gold for new jewellery

Trading in old jewellery against a new piece is generally treated as a sale of the old gold, even though no cash reaches you. The value the jeweller gives for the old piece is your sale consideration. If you held it more than 24 months, long-term rates apply to the gain. Many people do not realise this, so keep the exchange bill.

Gifted and inherited gold

Receiving gold from specified relatives, or on the occasion of your marriage, is not taxed when you receive it. Gifts from non-relatives totalling more than ₹50,000 in a year are taxed as income. Our guide on income tax on gold gifts has the details.

When you later sell gifted or inherited gold, special rules apply to the cost and holding period, generally linked to the previous owner. Confirm with a tax adviser before selling, and keep any records of the original purchase.

How other gold investments differ

The rules above are for physical gold. Gold ETFs, gold mutual funds and Sovereign Gold Bonds each have their own tax treatment, which has changed in recent budgets. See our comparison of physical gold and gold ETFs, and check the current rules with an adviser before redeeming.

NRIs selling gold in India

The same capital gains rules apply to an NRI selling physical gold in India: 12.5% on long-term gains and slab rates on short-term gains. The practical differences lie elsewhere. The buyer may need to deduct tax at source on a payment to a non-resident, and moving the proceeds abroad has its own banking rules.

If you live in the UAE, you may also find it simpler to sell in Dubai, as explained in our guide to selling old gold in Dubai. Talk to an adviser familiar with NRI taxation before a large sale.

Mistakes that raise your tax bill

• Selling a few weeks before the 24-month mark and paying slab rates on a large gain.
• Throwing away the original bill, then having no cost to set against the sale.
• Forgetting that an exchange for new jewellery is a sale too.
• Leaving the gain out of your return because "it was only old jewellery".

Cash, PAN and reporting

• You cannot accept ₹2 lakh or more in cash in one transaction (Section 269ST). Expect a bank transfer or cheque for large sales.
• Have your PAN ready; jewellers often ask for it on larger transactions.
• Report the capital gain in your income-tax return for the year of sale, in the capital gains schedule.

Seller's checklist

1. Find the original invoice and note the purchase date and cost.
2. Check whether 24 months have passed; if close, consider waiting.
3. Get a written bill from the buyer showing weight, purity and amount paid.
4. Take payment by bank transfer if the amount is ₹2 lakh or more.
5. Calculate the gain and set aside the tax.
6. Report it in your return and keep records for several years.

If you are weighing whether to sell at all, our pillar guide on investing in gold discusses gold's role in your savings.