Taxation on Gold ETFs

[sandhya_gujju]

How is the profit/loss of Gold ETFs taxed? If I hold it for an year and sell it after an year, will it come under the long term capital gains and hence no tax would be paid on it?

Or, will the short term capital gains tax be applicable differently on ETFs?

Any information would be highly appreciated.

 

[Mr.G]

Gold ETFs qualify for long-term capital gains treatment if these are held for just a year.

If units of paper gold are sold, while these qualify for short-term capital gains, you would be taxed according to your tax bracket.

Physical gold qualifies for long-term capital gains benefits if held for at least three years.

 

[sandhya_gujju]

Gold ETFs qualify for long-term capital gains treatment if these are held for just a year.

does that mean, no tax would need to paid? or as I read somewhere 10% with indexation needs to be paid?

 

[Mr.G]

does that mean, no tax would need to paid? or as I read somewhere 10% with indexation needs to be paid?

LTCG is exempted under Under Section 112 only if the transaction attracts STT.

ETFs don't attract STT and are NOT exempted so you will be taxed at 20% with indexation (meaning cost of such shares, securities or units adjusted to inflation) which is the standard LTCG.

10% without indexation is paid when you sell anything u/s 115AB, 115AC, 115AD and 115AE.

 

[sandhya_gujju]

in case of gold ETFs do I have an option to choose between taxation w/o indexation and taxation with indexation?

10% without indexation is paid when you sell anything u/s 115AB, 115AC, 115AD and 115AE.

do gold etfs come in any of those or u/s 54F and 54EC?

 

[Mr.G]

in case of gold ETFs do I have an option to choose between taxation w/o indexation and taxation with indexation?

do gold etfs come in any of those or u/s 54F and 54EC?

Yes you have an option to calculate it either way. And No Index ETFs come under that sections but not gold ETF.