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Usually, when one receives or inherits gold as a gift, tax does not need to be paid. But once it is sold, one is liable to pay LTCG or STCG based on the holding period.
When gold is received as an inheritance or gift, there is no capital gain. However, capital gains tax applies when it is sold. The original owner's purchase cost is considered as the purchase cost when one is selling the gold. It is also essential to have the tax invoice with the correct GST number and address.
Gold that is inherited or received as a gift is classified as a capital asset under the Income Tax Act. Consequently, gains from its sale are taxable as capital gains.
LTCGs on gold jewellery are taxed at 20 per cent with indexation benefits while short-term capital gains are added to the individual's total income and taxed according to applicable income tax slab rates.
While calculating the tax, one must keep in mind the particulars like How Gold is inherited, its original owner etc. One should also keep in mind the Cost Of Acquisition and the Indexed Cost Of Acquisition.
Compiled by Syed Muskan