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Tax on Gold ETF

Ashok (Not applicable) (24 Points)

16 May 2010

Dear Experts,

I have sold few gold ETFs last year as per following details

5 Units with holding period of 9 months (Gain 10,000)

10 Units with holding period of 4 years (Gain 30,000)

I want to know the tax applicable on these capital gains

and in which column/schdeule should these be mentioned in ITR-2

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4 Replies

Balaji (Knowledge Seeker) (317 Points)
Replied 16 May 2010

Dear Ashok,

Gains on Gold ETF will have the same treatment as Debt MFs.Accordingly,Rs.10,000/-(holding period of 9 months) would be Short-term Capital Gains which would be added to your income and charged to tax at the marginal rate of tax applicable to you.The 10 units held for 4 years would be Long-term Capital Gains.You have the option of either a) avail of indexation benefit on the cost price and pay 20% tax on the net gains or b) pay 10% tax on the nominal gain without indexation.The gains will have to be reflected in ITR 2 under Schedule CG in A2 [STCG] and B2[LTCG-with indexation] OR B3[LTCG-without indexation] respectively.

Ashok (Not applicable) (86 Points)
Replied 16 May 2010

Dear Balaji,

Thanks for answeing my query .

Is the gain from gold etf (holding period 9 months) to be included in

A5 Short term capital gain other than referred to in section 111A (A4 – A5)
OR A6

Similarly

Is the gain from gold etf (holding period 4 years to be included in

2 Asset in the case of others where proviso under section 112(1) is not exercised

a Full value of consideration 2a

b Deductions under section 48

i Cost of acquisition after indexation bi

ii Cost of improvement after indexation bii

iii Expenditure on transfer biii

iv Total (bi + bii +biii) biv

c Balance (2a – biv) 2c

d Deduction under sections 54/54B/54D/54EC/54F

54G/54GA

e Net balance (2c – 2d) 2e

3 Asset in the case of others where proviso under section 112(1) is exercised

a Full value of consideration 3a

b Deductions under section 48

i Cost of acquisition without indexation bi

ii Cost of improvement without indexation bii

iii Expenditure on transfer biii

iv Total (bi + bii +biii) biv

c Balance (3a – biv) 3c

d Deduction under sections 54/54B/54D/54EC/54F 3d

e Net balance (3c-3d) 3e

4 Amount deemed to be long term capital gains under sections 54/54B/54D/54EC/54ED/54F B

Originally posted by : Balaji
	Dear Ashok, Gains on Gold ETF will have the same treatment as Debt MFs.Accordingly,Rs.10,000/-(holding period of 9 months) would be Short-term Capital Gains which would be added to your income and charged to tax at the marginal rate of tax applicable to you.The 10 units held for 4 years would be Long-term Capital Gains.You have the option of either a) avail of indexation benefit on the cost price and pay 20% tax on the net gains or b) pay 10% tax on the nominal gain without indexation.The gains will have to be reflected in ITR 2 under Schedule CG in A2 [STCG] and B2[LTCG-with indexation] OR B3[LTCG-without indexation] respectively.