Buying gold this Dhanteras? How jewellery, Gold ETFs and SGBs are taxed

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Dhanteras 2026: From physical gold and ETFs to Sovereign Gold Bonds (SGBs), each avenue offers exposure to the yellow metal, but the tax treatment can vary significantly.

Dhanteras 2026: With Dhanteras around the corner and households gearing up to buy gold, many investors are weighing their options beyond traditional jwellery. From physical gold and ETFs to Sovereign Gold Bonds (SGBs), each avenue offers exposure to the yellow metal, but the tax treatment can vary significantly.

Understanding these differences can help investors make a more informed choice, especially at a time when gold continues to command strong interest as both a festive purchase and a long-term investment.

Gold Taxation in India: Physical Gold vs Gold ETF vs Sovereign Gold Bonds

Particulars	Physical Gold (Jewellery, Coins, Bars)	Gold ETF	Sovereign Gold Bond (SGB)
GST on Purchase	3% GST on gold value; jewellery making charges attract GST separately	No GST on ETF purchase as it is a security traded on exchanges	No GST on subscription/purchase
Short-Term Capital Gains (STCG)	Held up to 24 months- taxed at applicable income-tax slab rate	Held up to 12 months- taxed at applicable slab rate	Sold within 12 months- taxed at applicable slab rate
Long-Term Capital Gains (LTCG)	Held over 24 months-taxed at 12.5% without indexation	Held over 12 months- taxed at 12.5% without indexation	Sold after 12 months but before maturity- taxed at 12.5% without indexation
Interest In"come	Not applicable	Not applicable	2.5% annual interest is taxable at slab rate under "Income from Other Sources"
Tax on Maturity	Not applicable	Not applicable	Capital gains exempt only for original subscribers who bought at issue and hold till maturity (as per rules effective from April 1, 2026)

Example, If you invest Rs 1 lakh and sell for Rs 1.5 lakh:

Profit = Rs 50,000
If held for the required long-term period:
- Physical Gold: 12.5% tax on Rs 50,000 profit
- Gold ETF: 12.5% tax on Rs 50,000 profit
- SGB (held till maturity): No capital gains tax on the Rs 50,000 profit

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(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)

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