Income tax calculator: How gold sellers can save LTCG tax on wealth acquire

Income tax calculator: Selling gold (both bodily or digital or paper) after holding it for greater than three years, it attracts 20 per cent Long Term Capital Gain (LTCG) tax. However, beneath sure situations, one can keep away from paying this tax even after holding the dear bullion asset for greater than three years. Under Section 54F of the Income Tax Act, one can declare earnings tax exemption on web wealth gained from rom the sale of capital belongings comparable to shares, bonds, gold and many others., aside from a home property. However, the declare could be doable if the entire cash obtained from the gold sale is used for getting of residential property.

Explaining the earnings tax rule on gold promoting, Pankaj Mathpal, MD & CEO at Optima Money Managers stated, “The Income Tax rule says that one will have to pay LTCG tax of 20 per cent with indexation if the seller has hold its gold for more than 3 years. However, if the entire amount received from gold sale is used for buying a new residential property or for construction of a residential property, then the gold seller can claim income tax exemption on long term capital gain on one’s gold sell.”

However, Pankaj Mathpal maintained that for claiming earnings 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 stated, “If you cannot use the entire sale proceeds to buy/construct a new residential house property before the ITR filing due date, you must deposit the sales proceeds from gold assets in a Public Sector Bank’s Capital Gains Account. You can use these funds to buy/construct a new residential house property within the requisite timelines.”

Archit Gupta of Clear listed out the below-mentioned three situations the place earnings tax exemption beneath Section 54F turns into relevant:

1] You should purchase a brand new residential property one yr earlier than the sale of the capital asset; or

2] You should buy residential property inside two years from the sale date of the capital asset; or

3] You should construct/assemble a residential property inside three years from the sale date of the capital asset.

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