E-Gold

In 2010, the National Spot Exchange launched a unique investment product known as E-gold. This product has facilitated even the small investors to invest in gold in smaller denominations of as little as 1 gram and hold it in demat form. E –Gold is very much like investing in equity shares.

5. Tax Implications

Profits from the sale of gold jewellery, coins and bars are subjected to capital gains and thus are taxed. Selling physical gold within 3 years of purchase will attract short term capital gains tax and where else selling them after 3 years will be subjected to the long term capital gains tax.

"Though the buyer is required to deduct income tax at source, in most cases he would not as he would be unaware of the same. And therefore, the NRI seller will have to discharge the liability himself by making payment of income tax. It is important to note that even exchange of one form of jewellery for another gives rise to capital gains. The fair value of asset received is taken as the sale consideration for computing the capital gains," explains Vaibhav Sankla, Director, H&R Block India.

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