- Date : 18/09/2023
- Read: 3 mins
What is the tax liability on the sale of gold and who is liable when making a gold purchase in wife's name?
Every time you sell an asset at a higher price than what you bought it for, you are liable for capital gains tax. In this article, we will discuss income tax on gold and how gold tax works when gold purchase in wife's name is made?
Highlights:
- There are certain limits for unaccounted gold for individuals.
- The profits from reselling gold are distinguished based on the time between purchase and sale.
- The tax liability on the sale of gold falls on the buyer in most cases even if they purchase gold in wife's name.
What is your Gold Storage Limit?
There is no upper limit on gold storage for an individual as long as they can account for when they bought it and how they had the money to buy it. You can also keep some amount of gold without providing official accounting for it. They are varied based on the gender and marital status of the individual.
- Men: 100 gms
- Unmarried Women: 250 gms
- Married Women: 500 gms
Also Read: Gold Storage & Tax Rules
Gold Tax (Purchase)
Gold tax depends on the type of purchase and the services associated. You have to pay a 3% GST if you buy a pre-made gold bar, coin or jewellery. A higher 5% GST is applicable to making charges and goldsmith services if you desire a custom piece.
Gold Tax (Reselling)
Sale of physical gold is taxed based on the holding period. If the holding period is more than 3 years, the profit is categorised as long-term capital gain. A flat tax rate of 20% is applicable, excluding surcharges and cess. For holding periods of less than 36 months, the profit is categorised as short-term capital gain. It is added to the personal income of the buyer and taxed based on the tax slab it falls into.
Also Read: Selling Gold? Here are 5 things you must know
Who has the Tax Liability on the Sale of Gold?
Any income generated from gold purchase in wife's name and reselling it will be added to the income of the transferor (buyer). This will be true in all cases other than transfer of gold during divorce settlements or as part of an agreement while living apart.
Conclusion
Gold is a great physical asset for an individual to hold and sell based on their fiscal needs. But it is also heavily regulated, and the buyer has the responsibility to fulfil the tax liabilities on it.
Disclaimer: The information in this article is intended for general informational purposes only and should not be construed as financial advice. Readers are advised to do their research and due diligence before making financial decisions.
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