Gold & Silver Investment: Avoid Huge Losses by Understanding Taxation Rules

• Taxation on gold and silver depends on the investment type and holding period, crucial for determining short-term or long-term capital gains.
• Selling even one day early can push profits into a higher tax bracket, leading to significantly more tax (e.g., ₹36,000 extra on ₹2 lakh profit for highest slab).
• Physical/digital gold and silver incur 3% GST on value and 5% GST on jewelry making charges; profits held up to 24 months are short-term, over 24 months are long-term (12.5% tax without indexation).
• Gold/silver ETFs and mutual funds have short-term gains if sold within 12 months (taxed at slab rate) and long-term gains if held over 12 months (flat 12.5% tax).
• Sovereign Gold Bonds (SGBs) offer tax-free capital gains if redeemed at maturity (8 years); annual interest is taxed at slab rate, and early sales are taxed based on holding period.

Why It Matters: Understand gold and silver taxation, especially holding periods, to avoid significant losses and optimize investment returns.