Tax Saving Tips: If you sell gold and invest the money here, no tax will be charged, know the rules of Income Tax...
Nowadays people are showing a lot of interest in investing in gold. While buying a house, many people also raise money by selling the gold, jewelery, etc. they already have. If you are also making such a plan, then before doing that you should know about some income tax rules. Like shares and bonds, the government also collects capital gains tax on gold sales depending on the holding period.
For your information, let us tell you that under Section 54F, not only the tax on the sale of gold but also the capital gains tax arising from the sale of shares, bonds, mutual funds, or property is completely exempted. This benefit is given only to individual taxpayers or Hindu Undivided Family (HUF). If you have also sold gold and used the profits to buy or build a house, then you will not have to pay even a single penny as capital gains tax.
If you also want to save tax on your gold after selling it, then you will have to fulfill some conditions to save tax on the profit made on the sale of gold. First, the condition is that you will have to purchase the home within two years of selling the gold.
If you have purchased a house even one year before the sale of gold (gold sales rules), you are entitled to tax exemption. Yes, tax exemption will also be available if you invest in under-construction property within three years of the sale of gold.
This exemption is only on residential property
According to a report, Chirag Chauhan of Chauhan & Company says, “Taxpayers should keep in mind that exemption from capital gains tax on the sale of gold is available only on residential property, not commercial property.
Moreover, it should be purchased one year before or two years after the sale of assets on which capital gains are earned.”
Let us tell you that Thetavega Capital Founder CA Paras Gangwal says, “If taxpayers have more than one residential property then they cannot claim this exemption. The maximum limit for claiming exemption is ₹10 crore, which was introduced in Budget 2023, before which there was no such limit.”
Know what is capital gains tax?
Everyone must be aware that the government of the country also collects tax on the income earned from various types of investments. This tax is called capital gains tax. There are two types of capital gains tax, short-term and long-term (short-term and long-term capital gain tax).
The tax rates on these also vary. Suppose you had invested Rs 1 lakh in some property or gold a few years ago. Which has now increased to Rs 2 lakh, so Rs 1 lakh will be considered as capital gain i.e. profit. Tax will be taken from you only on this.
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