<p><br>Gold is simple to buy, understanding how it is taxed determines how much you actually keep.<br></p><p>Whether you invest in digital gold, physical gold, gold ETFs, Sovereign Gold Bonds, or structured gold leasing, tax rules directly affect your net return. This guide breaks down the updated 2026 framework clearly and practically.</p><p>You will learn:</p><p>• How digital gold is classified<br>• Short-term vs long-term capital gains rules<br>• GST implications<br>• ETF and SGB taxation<br>• How gold leasing income is treated<br>• Practical tax examples</p><p>Everything here reflects the post–Budget 2024 capital gains framework applicable in 2026.</p><hr><h2>How Digital Gold Is Treated Under Tax Law</h2><p>Digital gold is treated as a capital asset, just like physical gold. It is not classified as equity and it is not treated as a virtual digital asset.</p><p>This means profits are taxed under capital gains provisions of the Income Tax Act. A detailed breakdown of how gold assets are classified can be found in updated tax summaries such as ClearTax’s guide to taxation of gold investments<br><a target="_blank" rel="noopener noreferrer" href="https://cleartax.in/s/tax-on-gold-in-india">https://cleartax.in/s/tax-on-gold-in-india</a></p><hr><h2>Holding Period Rules That Matter</h2><p>For gold investments including digital gold, physical gold and gold ETFs:</p><p>• Sold within 24 months → Short Term Capital Gain<br>• Sold after 24 months → Long Term Capital Gain</p><p>The 24-month threshold determines how your profit is taxed. It does not matter how large the gain is. Holding period controls the rate.</p><p>Recent amendments to capital gains taxation were introduced in the Union Budget and are reflected in updated capital gains summaries<br><a target="_blank" rel="noopener noreferrer" href="https://cleartax.in/s/long-term-capital-gains">https://cleartax.in/s/long-term-capital-gains</a></p><hr><h2>Tax on Digital Gold in 2026</h2><h3>If Sold Within 24 Months</h3><p>Gains are added to your total income and taxed at your slab rate.</p><p>If you fall under:<br>5 percent slab → taxed at 5 percent<br>20 percent slab → taxed at 20 percent<br>30 percent slab → taxed at 30 percent</p><p>Plus applicable surcharge and 4 percent health and education cess.</p><hr><h3>If Sold After 24 Months</h3><p>Long Term Capital Gains are taxed at 12.5 percent.</p><p>Under the newer capital gains regime, indexation benefit does not apply to many non-equity assets including gold.</p><p>This is a key change from older articles that still mention 20 percent with indexation.</p><hr><h2>GST on Digital Gold</h2><p>When you purchase digital gold:</p><p>• 3 percent GST is charged on the value of gold<br>• If you convert into minted coins or bars, additional making-related GST may apply</p><p>GST applies only at the time of purchase. When you sell, capital gains tax applies instead.</p><p>The official GST rate structure for gold is outlined under CBIC notifications<br><a target="_blank" rel="noopener noreferrer" href="https://www.cbic.gov.in">https://www.cbic.gov.in</a></p><hr><h2>Tax on Physical Gold</h2><p>Physical gold follows the exact same capital gains structure:</p><p>Less than 24 months → slab rate<br>More than 24 months → 12.5 percent LTCG</p><p>Jewellery, coins and bars are treated similarly for taxation purposes.</p><hr><h2>Tax on Gold ETFs</h2><p>Gold ETFs are regulated investment instruments under SEBI.</p><p>Their taxation broadly mirrors other non-equity assets:</p><p>Less than 24 months → slab rate<br>More than 24 months → 12.5 percent LTCG</p><p>Regulatory structure for mutual funds and ETFs can be reviewed under SEBI’s framework<br><a target="_blank" rel="noopener noreferrer" href="https://www.sebi.gov.in">https://www.sebi.gov.in</a></p><hr><h2>Tax on Sovereign Gold Bonds</h2><p>Sovereign Gold Bonds are issued by the<br>Reserve Bank of India<br>on behalf of the Government of India.</p><p>Their tax profile is different:</p><p>If held till maturity (8 years):<br>Capital gains are exempt for original subscribers.</p><p>If sold before maturity in the secondary market:<br>Capital gains tax applies based on holding period.</p><p>The 2.5 percent annual interest paid on SGBs is taxable as income.</p><p>Full details are available in RBI’s official SGB FAQs<br><a target="_blank" rel="noopener noreferrer" href="https://www.rbi.org.in">https://www.rbi.org.in</a></p><hr><h2>How Gold Leasing Is Taxed</h2><p>Gold leasing introduces two return components:</p><ol><li><p>Gold price appreciation</p></li><li><p>Leasing yield</p></li></ol><p>Price appreciation follows normal capital gains rules.</p><p>The leasing yield component depends on structure:</p><p>If paid in cash → treated as income and taxed at slab rate<br>If credited as additional gold grams → taxation typically occurs when sold</p><p>Because leasing models can differ structurally, proper documentation and reporting are important. Investors should consult a qualified tax advisor before participating in structured gold yield programs.</p><hr><h2>Is There TDS on Digital Gold?</h2><p>Standard retail digital gold transactions generally do not attract routine TDS.</p><p>However, high-value transactions may fall under reporting obligations under Section 285BA of the Income Tax Act.</p><hr><h2>Practical Example</h2><p>Investment: ₹1,00,000<br>Held for 3 years<br>Sale value: ₹1,50,000<br>Gain: ₹50,000</p><p>LTCG at 12.5 percent = ₹6,250<br>Plus cess</p><p>Net post-tax gain approximately ₹43,500</p><p>Tax efficiency meaningfully affects real returns.</p><hr><h1>FAQ </h1><p></p><h3>Is digital gold taxable in India?</h3><p>Yes. It is treated as a capital asset and taxed under capital gains rules.</p><h3>What is the LTCG rate on gold in 2026?</h3><p>12.5 percent if held more than 24 months.</p><h3>Is GST applicable on digital gold?</h3><p>Yes. 3 percent GST is charged at the time of purchase.</p><h3>Are gold ETFs taxed differently?</h3><p>No. They follow similar capital gains rules for non-equity assets.</p><h3>Is gold leasing income taxable?</h3><p>Yes. Yield received is taxable either as income or capital gain depending on structure.</p>

Learn how digital gold is taxed in India in 2026. Understand capital gains rules, GST impact, ETF and SGB taxation, and how gold leasing income is treated.

Tax on Digital Gold in India (2026): Capital Gains, GST, ETF & Gold Leasing Rules

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