Gold has always held a special place in indian households, often passed down as a symbol of wealth, tradition, and security. But many heirs are confused about whether inherited gold is taxable, especially if they plan to sell it. Here’s what you need to know.

1. Inheritance of gold is Not Taxable

· Receiving gold from parents, grandparents, or relatives through inheritance is not considered taxable income.

· You do not pay income tax at the time of receiving inherited gold.

· However, accurate documentation of inheritance (like a will or legal transfer) is recommended for future reference.

2. Tax Implications When Selling Inherited Gold

· When you sell inherited gold, Capital Gains Tax (CGT) may apply.

· Long-term capital gains (LTCG): gold held for more than 3 years qualifies for LTCG tax at 20% with indexation.

· Short-term capital gains (STCG): gold held for less than 3 years is taxed as per your income slab, similar to regular income.

3. Calculating capital Gains on Inherited Gold

· Cost of acquisition: For inherited gold, use the cost of acquisition of the original owner (your parent or grandparent).

· Indexed cost: Adjusted for inflation using Cost Inflation Index (CII) to calculate LTCG.

· Sale price: Amount received when selling the gold.

· capital Gain = Sale Price – Indexed Cost of Acquisition

4. Exemptions You Can Claim

· Investment in specified assets: Under Section 54, you may claim tax exemption if capital gains are reinvested in certain assets like bonds or residential property.

· Gift to relatives: Gifts to specified relatives are not taxable, though capital gains tax applies when they sell it later.

5. Documentation You Should Keep

· Proof of inheritance: Will, legal transfer documents

· Purchase receipts (if available for calculating indexed cost)

· Bank statements or sale receipts when selling gold

6. Key Takeaways

· Inherited gold itself is not taxed.

· Selling it may attract capital gains tax, depending on the holding period.

· Proper documentation and planning can help reduce tax liability.

7. Conclusion

While inheriting gold is tax-free, selling it without understanding capital gains rules can lead to unexpected tax payments. Always keep records and calculate gains carefully to stay compliant and avoid penalties.


Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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Balasahana Suresh

15/09/2025 10:02 AM