Is your gold tax-free? Simple rules for Indian households:Selling or exchanging old jewellery? Here is how much tax you must pay

Gold and silver are highly valued in Indian households. However, many people do not know the tax rules the government of India has imposed on them when they receive, exchange, or sell their jewellery. According to tax expert CA Ashish Niraj, here is a simple guide to how gold is taxed in India. 1. Inheriting Gold is Tax-Free If you inherit gold or silver jewellery from close family members—like your parents, spouse, or children—you do not have to pay any tax. The government does not treat inherited gold as income. Similarly, any gold you receive as a gift during your wedding is also completely tax-free. 2. Exchanging Gold is Treated as a Sale Many families take old jewellery to a jeweller to exchange it for new designs. You might think this is just a swap, but the tax department views this exchange as a sale. Because you “sold” your old gold to buy new gold, you must pay Capital Gains Tax on any profit made from the old jewellery. 3. Selling Gold Attracts Tax If you sell your jewellery for cash, you must pay tax on your profits. The tax rate depends on how long you have owned the gold: Under Two Years: If you sell gold within two years of buying it, the profit is called a Short-Term Capital Gain. This profit is added to your yearly income, and you pay tax according to your personal income tax slab. Over Two Years: If you sell gold after keeping it for more than two years, it is a Long-Term Capital Gain. The tax rate is 12.5%. However, if you bought the gold before July 23, 2024, you can choose to pay a 20% tax with “indexation” benefits (which adjust the purchase price for inflation). 4. Selling Inherited Gold Selling gold that you inherited is always treated as a long-term sale. To calculate your profit, the tax department looks at what the original buyer paid for it. If they bought it before April 1, 2001, the market value of the gold on that date is used to calculate your tax. So, here also 12.5% tax will be levied.