Revenue tax calculator: Promoting gold (both bodily or digital or paper) after holding it for greater than three years, it attracts 20 per cent Lengthy Time period Capital Achieve (LTCG) tax. Nonetheless, beneath sure situations, one can keep away from paying this tax even after holding the valuable bullion asset for greater than three years. Beneath Part 54F of the Revenue Tax Act, one can declare revenue tax exemption on web wealth gained from rom the sale of capital belongings similar to shares, bonds, gold and many others., apart from a home property. Nonetheless, the declare could be attainable if the entire cash acquired from the gold sale is used for purchasing of residential property.
Explaining the revenue tax rule on gold promoting, Pankaj Mathpal, MD & CEO at Optima Cash Managers mentioned, “The Revenue Tax rule says that one must pay LTCG tax of 20 per cent with indexation if the vendor has maintain its gold for greater than 3 years. Nonetheless, if the whole quantity acquired from gold sale is used for purchasing a brand new residential property or for development of a residential property, then the gold vendor can declare revenue tax exemption on long run capital acquire on one’s gold promote.”
Nonetheless, Pankaj Mathpal maintained that for claiming revenue tax exemption on gold promote, one has to purchase a brand new residential property inside 2 years of gold promote and within the case of development of recent residential property, the given time is 3 years.
Echoing with Pankaj Mathpal’s views, Archit Gupta, Founder & CEO at Clear mentioned, “Should you can not use the whole sale proceeds to purchase/assemble a brand new residential home property earlier than the ITR submitting due date, it’s essential to deposit the gross sales proceeds from gold belongings in a Public Sector Financial institution’s Capital Beneficial properties Account. You need to use these funds to purchase/assemble a brand new residential home property inside the requisite timelines.”
Archit Gupta of Clear listed out the below-mentioned three situations the place revenue tax exemption beneath Part 54F turns into relevant:
1] You need to purchase a brand new residential property one 12 months earlier than the sale of the capital asset; or
2] You need to buy residential property inside two years from the sale date of the capital asset; or
3] You need to construct/assemble a residential property inside three years from the sale date of the capital asset.