Tax on gold in India in 2026

Diwali 2026 falls on Sunday, 8 November. Shops will be busy. The tax question is not the day you buy. It is the day you sell, and the form the gold was in.

Physical gold, jewellery and digital gold held for 24 months or less are taxed in your income-tax slabs. Held for more than 24 months, the gain is taxed at 12.5% under section 197 of the Income-tax Act, 2025. A listed gold ETF uses 12 months, not 24. A Sovereign Gold Bond is different again: interest is taxed every year, and the maturity redemption is tax-free only if you subscribed at the original issue and held the bond until maturity.

Cess is 4% on the tax. Gold does not get the ₹1.25 lakh exemption that listed shares get. Gold does not get indexation.

Buying gold is not the tax event

You can buy a coin, a chain or a gold ETF at Diwali and owe no income tax that week. Income tax looks at income. A purchase is not income.

The bill is still worth keeping. It shows what you paid. That figure becomes the cost when you sell. If the bill splits the gold, the making charges and GST, add them. The cost is the money that left your account, not the rate card on the wall.

A gift is different from a shop purchase. This guide is about the tax on a sale. If someone who is not in the family list in the Act gives you gold, there can be tax in the year you receive it. That is a separate rule from capital gains. Check it before you only look at the sale.

How long you held it decides the rate

Section 2(101) sets the holding period. The default is 24 months. A capital asset held for not more than 24 months is short-term. One exception is a security listed on a recognised stock exchange in India. For that security, 12 months replaces 24 months. A listed gold ETF is in that exception. A coin in a locker is not.

Count the period to the day. A sale on the anniversary is still short-term. The capital gains calculator uses the same test: the sale is short-term when it falls on or before the holding anniversary.

Table: Holding period for a sale in FY 2026-27

Short-term means your slabs. Long-term gold is LTCG at 12.5%, then cess. The long-term rate does not change if you file the old regime or the new one. A short-term gain does, because it is added to your other income.

Physical gold and jewellery

Jewellery is a capital asset even when you wear it. The Act does not treat personal jewellery as a household effect that escapes tax. A sale of bangles, a chain or coins is a transfer.

The gain is the sale price, minus brokerage or other transfer costs, minus what you paid. Making charges and GST on the purchase bill sit in the cost. Do not deduct them a second time. Do not replace the cost with today’s rate.

There is no indexation on gold. Indexation raises the purchase price with the Cost Inflation Index. Section 197(3) allows a resident individual or Hindu undivided family to compare 12.5% without indexation and 20% with indexation, but only for land or a building bought before 23 July 2024. A coin bought in 2016 uses the rupees you paid in 2016.

The ₹1.25 lakh exemption is section 198. It covers long-term gains on listed equity shares, equity-oriented fund units and business-trust units when securities transaction tax was paid. It does not cover gold.

A coin held past two years

Take coins bought on 1 April 2023 for ₹2,00,000 and sold on 8 November 2026 for ₹3,20,000. That is more than 24 months, so it is long-term. The gain is ₹1,20,000.

Put ₹24,00,000 in the calculator as other taxable income, in the new regime. The nil slab is already used by that income. Tax on the gain before cess is ₹15,000. The extra tax because of this sale, cess included, is ₹15,600. The calculator labels the row Section 197, at 12.5%, with no ₹1.25 lakh exemption.

You can repeat it on the capital gains calculator. Choose gold, then “Coins, bars or jewellery”. Buy date 1 April 2023. Sell date 8 November 2026. Cost ₹2,00,000. Sale ₹3,20,000. Other income ₹24,00,000.

Jewellery bought last Diwali

Last Diwali was 20 October 2025. A sale on 8 November 2026 is about a year and three weeks. That is still inside 24 months, so it is short-term.

Say the bill in 2025 was ₹80,000, making charges and GST included, and a shop pays ₹95,000 on 8 November 2026. The gain is ₹15,000. With the same ₹24,00,000 of other taxable income, you are already in the 30% band of the new regime. The extra tax because of this sale is ₹4,680. The term on the calculator is “Short-term, 24 months or less”.

That is the Diwali point. Jewellery you bought last festival is not long-term yet. Jewellery you bought the Diwali before that, on 20 October 2024, crosses 24 months on 20 October 2026. A sale on 8 November 2026 is long-term, at 12.5%.

If your other income is lower, the short-term gain can fall in a lower slab, or inside the section 156 rebate. The income tax calculator shows the slab. The capital gains page adds the gain to the other income you type and shows the extra tax.

Gold ETFs and gold funds

A gold ETF that is listed on a recognised stock exchange is a listed security. Twelve months is the line. Units bought on 1 June 2025 and sold on 8 November 2026 have been held for more than 12 months.

Cost ₹1,00,000, sale ₹1,40,000, other taxable income ₹24,00,000. The gain is ₹40,000. Tax on that gain before cess is ₹5,000. Extra tax with cess is ₹5,200. On the calculator, choose gold and then “Listed gold ETF”.

The same ETF bought on 15 January 2026 and sold on 8 November 2026 is still inside 12 months. The gain is the same ₹40,000, but it is short-term and goes into your slabs. Extra tax with the same other income is ₹12,480.

A gold mutual fund that is not listed does not get the 12-month line. Section 2(101) gives 12 months to a listed security and to a unit of an equity-oriented fund. A gold fund is not an equity-oriented fund. If the units are not listed, use 24 months. On the calculator, that is the coins path, not the listed ETF button. Read the scheme document if you are unsure whether your units are listed.

Securities transaction tax is not the tax in this guide. The 12.5% and the slab tax are income tax. Your contract note may also show brokerage and other charges. Brokerage on the sale reduces the gain. Type it as a transfer expense.

Sovereign Gold Bonds

A Sovereign Gold Bond is a bond issued by the Reserve Bank of India. It tracks gold, and it pays interest. The usual retail series under the Sovereign Gold Bond Scheme, 2015 pays 2.5% a year on the issue price, in two instalments. Later series kept that rate. The interest is taxed at your slab in the year it is paid. It is not a capital gain, and holding the bond to maturity does not wipe it.

The capital-gains rule changed from 1 April 2026. Section 43 of the Finance Act, 2026 replaced section 70(1)(x). The new clause says a redemption of a Sovereign Gold Bond is not a transfer if an individual held it from the date of original issue till maturity. The old wording was wider. It covered redemption by an individual, without the words “from the date of original issue till maturity”.

If you applied in the issue and the Reserve Bank redeems the bond at maturity, that redemption is not a transfer. There is no capital-gains tax on it. Interest received earlier was already taxed. If you bought the bond on the exchange, you are not the original holder, so the exemption does not apply. A sale on the exchange uses the 12-month listed-security clock. Selling before maturity is a transfer even if you subscribed at issue. A premature window is not “till maturity”.

The calculator row for a Reserve Bank redemption does not ask whether you bought at issue. Use it only when you held the bond from the original issue until maturity. Otherwise choose listed gold. Do not use that row for a premature exit. It will show no capital-gains tax, which is wider than the amended clause.

Digital gold

Digital gold on a platform is not a listed security and it is not a Sovereign Gold Bond. Treat it like a coin. The holding period is 24 months. After that, section 197 taxes the gain at 12.5%, with no indexation and no ₹1.25 lakh exemption. A shorter hold goes into your slabs.

The cost is the platform invoice, including GST. The balance shown in the app is not the cost. If the platform deducts a fee on the way out, the sale price is what you receive. Do not also deduct that fee as an expense.

A gold ETF is a different clock. The ETF is listed, so 12 months is enough for the 12.5% rate, and the record is the demat statement. Digital gold stays on 24 months even when the gold price matches.

What does not carry over from shares

The ₹1.25 lakh exemption is only section 198. Long-term gold is section 197. Indexation is the section 197(3) choice for land or a building, not for a coin. The section 156 rebate can wipe slab tax. It does not wipe tax under section 197, so a long-term gold gain can still be taxed when salary is inside the rebate. A short-term gain is inside the slabs, so the rebate can change that bill.

A long-term loss sets off only against long-term gains. The calculator does not set a loss off against your salary. Sections 108 and 111 are the set-off rules.

Gifts, inheritance and a part sale

If gold came to you by gift or under a will, you often use the earlier owner’s cost, and the holding period can include the time they held it. Section 73 covers that cost. Section 2(101) brings in the earlier period when it applies. The calculator cannot see a relative’s bill. Type the earlier cost and the earlier buy date when that rule fits.

Do not invent a cost if the bill is missing. A jeweller’s estimate of today’s value is not what was paid. If you sell part of a holding, split the cost. Twenty grams bought together and eight grams sold use eight-twentieths of the bill, not the whole bill.

How to run the same sum on the calculator

Open the capital gains calculator. Its rates cover a sale from 23 July 2024 through 31 March 2027, including 8 November 2026.

1. Choose gold.
2. Choose “Coins, bars or jewellery” for physical gold, digital gold and an unlisted gold fund. Choose “Listed gold ETF” for a listed ETF, and for an SGB sold on the exchange.
3. Type the sale price, the cost from the bill, and both dates.
4. Type other taxable income after the standard deduction and the deductions you will claim.
5. Read “extra tax because of this sale”. That line includes cess. It is not the tax on your salary as well.

The page does not apply sections 82 to 88. Those are reinvestment rules for a house, farm land or specified bonds in the cases they name. Swapping one chain for another is not that relief.

Keep the purchase bill and the sale invoice. The gain is those two amounts and the two dates. Figures here were checked on 28 October 2026 against the Act as amended by the Finance Act, 2026, using the same engine as the calculator. A later Act can change a rate. The calculator will not guess a sale after 31 March 2027.