Dhanteras 2026 falls on Friday, 6 November — and it is the one day millions of us buy gold. Jewellery for the family, a coin for the locker, or maybe digital gold on an app. The excitement is real, and so is the confusion about tax. Gold is one of the few things where you pay tax twice — GST when you buy, capital-gains tax when you sell. Get the rules right before you stand in the queue.
Quick answer: In 2026, gold held for more than 24 months (physical, digital, coins, bars, gold mutual funds) attracts 12.5% long-term capital-gains tax with no indexation. Sold within 24 months, the gain is taxed at your income-tax slab rate. Gold ETFs need only 12 months for the 12.5% rate. Sovereign Gold Bonds are tax-free at maturity only for the original subscriber — secondary-market buyers lost that exemption from 1 April 2026.
By the numbers
- India’s jewellery demand fell 24% in 2025 — 430.5 tonnes (World Gold Council, via fxstreet, 21 Oct 2026).
- Bar-and-coin demand rose 17% — 280.4 tonnes (same source).
- Gold price gained roughly 73% in rupee terms by late December 2025.
The shift is clear: as prices climbed, buyers moved from jewellery to bullion. From a tax point of view, that move makes sense — coins and bars dodge the 5% GST on making charges entirely.
Comparison: every way to buy gold, side by side
| Gold option | GST at purchase | Holding period for LTCG* | LTCG rate | STCG rule | Who it suits |
|---|---|---|---|---|---|
| Physical jewellery | 3% on gold value + 5% on making charges | More than 24 months | 12.5% (no indexation) | Slab rate | Wearing and tradition; willing to pay making charges |
| Coins / bars | 3% on gold value, no making charges | More than 24 months | 12.5% (no indexation) | Slab rate | Pure investors who want tangible metal |
| Digital gold | 3% on gold value, no making charges | More than 24 months | 12.5% (no indexation) | Slab rate | App-based buyers who want instant purchase |
| Gold ETF (listed) | No GST on units | More than 12 months | 12.5% (no indexation) | Slab rate | Investors who want liquidity and market-price transparency |
| Gold mutual fund (feeder) | No GST on the investment itself | More than 24 months | 12.5% (no indexation) | Slab rate | Investors who prefer a managed route |
| Sovereign Gold Bond (SGB) | No GST | 8-year maturity = exempt for original holder | Nil (original subscriber); 12.5% if bought on exchange after 1 Apr 2026 | Interest taxed at slab every year | Long-term holders who got the primary issue |
LTCG = long-term capital gain. STCG = short-term capital gain.
What is the tax on gold after 2 years?
If you keep physical gold (jewellery, coins, bars) or digital gold for more than 24 months, any profit is taxed at a flat 12.5%. There is no indexation benefit — the Finance Act 2024 removed it with effect from 23 July 2024, so the old “20% with indexation after 36 months” rule is dead. If you sell within 24 months, the gain is added to your total income and taxed at your slab rate, under whichever regime (old or new) you use.
This 24-month line is the single most important number in gold tax. One month short, and you pay slab rates instead of 12.5%. For the full rate table across asset classes, see our capital gains tax guide 2026.
Is digital gold taxable in India?
Yes. Digital gold is taxed exactly like physical gold because vaulted metal stands behind every gram you buy on the app. Hold for more than 24 months → 12.5% LTCG. Sell earlier → slab rates. A purchase also attracts 3% GST on the gold value — there is no GST on making charges, since nothing is fabricated. One caution: digital-gold platforms in India are not regulated by SEBI or RBI, so buy only from a reputed provider, and check the buy-sell spread and any custody fee after the free vaulting period.
What is the tax on gold ETF in India?
Gold ETFs are treated as listed securities, so the holding threshold is shorter: hold the units for more than 12 months and the profit is a long-term capital gain taxed at 12.5% (no indexation). Sell within 12 months and the gain is taxed at your slab rate. There is no GST when you buy or sell ETF units — you need a demat account, and that is it. For anyone who wants gold exposure without worrying about lockers or purity certificates, the 12-month LTCG window is the ETF’s biggest tax advantage over physical gold.
What is the tax on gold mutual funds?
Gold mutual funds (usually feeder funds that invest in gold ETFs) use the 24-month yardstick, not 12. Held beyond 24 months → 12.5% LTCG; held less → slab rates. Like ETFs, there is no GST on the invested amount — tax appears only on fund management fees as a service. One flagged nuance: units acquired before 1 April 2023 followed the pre-2023 rules, so check the rule that applied in your purchase year.
Is SGB maturity tax free?
For the original subscriber — the person who bought the bond in the primary issue from the RBI — redemption after the 8-year term is exempt from capital-gains tax. But Budget 2026 tightened this: from 1 April 2026, SGBs bought on the stock exchange (secondary market) no longer enjoy the tax-free maturity. Gains on such bonds are taxed at 12.5% LTCG (if held more than 12 months), otherwise slab rates.
Two more SGB facts that trip people up: the 2.5% annual interest (paid half-yearly on the issue price) is taxable every year as Income from Other Sources at your slab rate, with no TDS — you must report it in your return, the same way NSC interest is taxable every year. And you can exit early: RBI’s premature redemption window opens after 5 years on interest-payment dates, or you can sell on the exchange any time — both exits are taxable as capital gains. The government has not issued a fresh SGB tranche since February 2024, so the only way to buy today is the secondary market on NSE or BSE — where the Budget 2026 restriction now applies.
How much GST is charged on gold jewellery and making charges?
GST on jewellery has two parts:
- 3% on the gold value.
- 5% on the making charges.
Worked example: you buy a necklace with gold worth Rs 52,000 and making charges of Rs 5,200.
- GST on gold: 3% × Rs 52,000 = Rs 1,560
- GST on making: 5% × Rs 5,200 = Rs 260
- Total GST: Rs 1,820 on a Rs 57,200 bill
Making charges in the market typically run 8–25% of the gold value, and that amount is never recovered when you sell the jewellery later. This is why the comparison table matters: a coin buyer pays 3% and walks away, while a jewellery buyer pays 3% + 5% on top of charges that are already lost money.
What about exchanging old jewellery this Dhanteras?
Exchanging old jewellery is a smart Dhanteras move, and the tax treatment is friendly. When you exchange old jewellery for new, GST is generally charged only on the incremental value — the difference between the new purchase and the old gold’s value. And when an individual sells or exchanges old jewellery, there is no GST on the old gold itself. Keep your old purchase bills, though: if you ever sell gold outright for a profit, the bill is your proof of acquisition cost for the capital-gains calculation.
Is inherited gold taxable in India?
India has no inheritance tax. When you inherit gold, you pay nothing at the time of receipt. But when you later sell it, capital-gains tax applies — and the cost of acquisition is the original owner’s purchase price, with the holding period counting from when the previous owner bought it. That long combined holding period usually puts inherited gold straight into the 12.5% LTCG bracket, which is genuinely useful.
Gifts work on the same logic as cash gifts: gold gifted by specified relatives (spouse, parents, siblings, children and the rest of the defined list) is tax-free in any amount. Gifts from non-relatives are taxable as Income from Other Sources if the aggregate value exceeds Rs 50,000 in a financial year — and here the trap matters: cross Rs 50,000 and the entire amount becomes taxable, not just the excess.
Dhanteras gold tax: what changed in 2026 — and what stayed the same?
Changed (Budget 2026): secondary-market SGB buyers lost the tax-free maturity benefit from 1 April 2026. If you bought SGBs on NSE/BSE this year, plan for 12.5% LTCG on the maturity gain instead of zero.
Changed (no new supply): no fresh SGB tranche since February 2024, confirmed by Budget 2025–26. Paper gold today means ETFs, mutual funds, or exchange-bought SGBs.
Stayed the same: the 24-month / 12.5% rule for physical and digital gold, the 12-month / 12.5% rule for gold ETFs, 3% GST on gold value and 5% on making charges, and 2.5% taxable SGB interest. Budget 2026 kept capital-gains taxes on gold otherwise unchanged.
Which gold is most tax-efficient this Dhanteras?
- Jewellery carries the highest all-in cost: double GST (3% + 5% on making) plus making charges that never come back. Buy it to wear, not to invest.
- Coins and bars avoid making-charge GST entirely and follow the same 24-month LTCG rule. For Dhanteras buyers who want metal in hand, this is the cheapest tax route.
- Digital gold mirrors physical gold’s tax treatment with 3% GST — convenient for small, frequent buys, but no tax advantage.
- Gold ETFs win on liquidity and need only 12 months for the 12.5% LTCG rate, with no GST. If you might sell within two years, this is the most tax-efficient choice.
- Gold mutual funds suit investors who prefer a managed route; the 24-month rule applies.
- SGBs remain the most tax-friendly option for the original subscriber (zero tax at maturity plus 2.5% interest). Just remember: if you buy on the exchange now, you are a secondary-market buyer, and the exemption is gone.
Verdict: for a pure long-term investment this Dhanteras, coins/bars or a gold ETF held beyond 12 months beat jewellery on tax and cost. Jewellery is for the neck, not the portfolio.
FAQ
Is digital gold taxable in India?
Yes. Digital gold follows the same 24-month rule as physical gold: 12.5% LTCG after 24 months, slab rates before that. A 3% GST applies at purchase.
What tax do I pay if I sell gold after 2 years?
A flat 12.5% long-term capital-gains tax, without indexation. Holding for more than 24 months is what qualifies.
Is SGB maturity tax free?
Only for the original subscriber. Bonds bought on the stock exchange after 1 April 2026 are taxed at maturity (12.5% LTCG if held over 12 months).
How is GST calculated on jewellery making charges?
5% GST on the making-charge amount, plus 3% GST on the gold value. On Rs 52,000 of gold with Rs 5,200 making charges, total GST is Rs 1,820.
Do I pay tax on inherited gold?
No tax at inheritance. When you sell, capital-gains tax applies using the original owner’s cost and the combined holding period.
Are gifts of gold taxable?
Gifts from specified relatives are fully tax-free. Gifts from non-relatives are taxable if the total value exceeds Rs 50,000 in a financial year — and then the whole amount is taxed, not just the excess.
Official sources
- Income Tax Department — incometax.gov.in — capital-gains rates and holding periods
- CBIC — cbic.gov.in — GST rates on gold and making charges
- Reserve Bank of India — rbi.org.in — Sovereign Gold Bond scheme features
- GST portal — gst.gov.in — GST notifications and rates
Reviewed by Asuthod Rathod, CA · Last updated: 24 October 2026
This article explains tax rules in simple words; it is not tax advice. Check current rates with a qualified tax professional before investing.
Editorial byline for eircicai income tax guides — covering the Income Tax Act, 2025, section renumbering, regime comparison, and deductions. Content is reviewed by Asuthod Rathod, CA.