If you are going to sell old gold and buy new gold, know what are the income tax rules

Capital Gains Tax:  We all sell our old jewellery and buy new design jewellery. But very few people know that capital gains tax has to be paid on selling old jewellery and buying new jewellery. Selling old gold to buy new jewellery is seen as the sale of old property. Union Finance Minister Nirmala Sitharaman had announced changes in the rules related to capital gains in Budget 2024.

Capital gains tax will have to be paid at the rate of 12.5 per cent

Under the new rules, if a person sells any non-financial asset after more than two years of purchase, then capital gains tax has to be paid at the rate of 12.5 per cent without indexations. When an asset is sold in less than two years, it is considered short-term capital gains and the profit is added to the total income for tax at slab rate.

Can I claim a tax exemption?

If you use the sale proceeds to buy property, you can claim an exemption on income tax. According to tax expert CA Chirag Chauhan, under section 54F, when the sale proceeds are used to buy property, you can claim an exemption on income tax. But when gold or other precious metal is sold to buy a new property, it is considered a new purchase and capital gains arising from the sale are taxed.

Understand the calculation of tax with an example.

For example, if you bought a gold chain two years ago, by selling it you earned a capital gain of Rs 50,000. You will have to pay Rs 6250 (12.5 x 50,000/100) on this capital gain. Along with this, you will also have to pay a 4 per cent cess (Rs 250) on it. In this way, you will have to pay a total tax of Rs 6500. These new rules came into effect on 23 July with the introduction of the Finance Bill 2024.