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Jewellery to SGB/R-GDS

n1ghthawk (Engineer) (7 Points)

04 March 2021

Hi,

I received gold jewellery as gift from my in-laws (approx.640 grams). I would like to convert my gold jewellery to either SGB or R-GDS. I would prefer SGB as it can be dematerialised & pledged. However, I am concerned about tax implications. Following are my primary concerns:

Does sale of gold jewellery to buy SGB attract Capital Gains Tax?
Does deposit of jewellery for R-GDS attract capital gains?
I don't have any bills as it was a gift during my marriage. Does converting to Bonds/Gold Deposit arise to any income tax issues in future?
Are there any other legal/tax issues I should be concerned about?

Also, please advice if this is a bad idea from an investment point of view.

Thanks in advance,

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4 Replies

Kapadia Pravin (17249 Points)
Replied 04 March 2021

1. Yes
3. No issues if correct path followed
4. No issues

n1ghthawk (Engineer) (7 Points)
Replied 04 March 2021

Thanks Kapadia Pravin. Does conversion of jewellery to R-GDS attract capital gains tax?

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 05 March 2021

Reply to point no. 2.

(a) Interest earned on R-GDS would be exempt u/s 10(15)(vi) of the Income Tax Act.

(b) Capital gains made on the bonds through trading or at redemption exempt from Capital Gains Tax under section 2(14)(vi) of Income Tax Act.

Regards,

Manoj

n1ghthawk (Engineer) (7 Points)
Replied 05 March 2021

Hi Manoj,

Thanks for your reply. However, I was actually concerned whether there is any capital gains tax that would arise during conversion of gold jewellery to R-GDS

Thanks,

AB.