How LTCG is applicable on Gold ETF? How it is calculated?

asked Sep 20 '11 at 11:33 by sakiv1089 18682339

Gains on Gold ETFs will be taxable on basis of tenure of investment.

If they are kept for less than three years, it will be short term gain and whole gains will be added to taxable income and taxed as per slab rates.

Else, it will be long term gains and income tax would be payable at 20% after indexation benefit. This income tax can be saved under section 54F (by buying a residential property) and 54EC (investing to capital gain bonds).

Below is sample computation for LTCG and income tax:

Purchase Year = A
Purchase Cost = P
Cost Inflation Index (CII) for purchase year = X

Sale Year = B
Selling price = Q
CII for sale year = Y

Indexed Purchase price = P x (Y/X) = R
Long term capital gain = Q - R = S
Income tax on capital gain = S x 20%

answered Sep 24 '11 at 17:52 by Pankaj Batra 5.2k320

Thanks for advise, but I think LTCG, S = (Q-P)-R and not as you mentioned as S=Q-R, Pl let me know if I am wrong, Also tell me whether I can reduce this tax by saving under sect 80C schemes or it can be done only under sect 54F & 54EC.
(Sep 27 '11 at 11:55) sakiv1089
Long term gains will be sale price(Q) - indexed purchase cost (R). Tax saving from this gain can only be done under section 54F and 54EC.
(Sep 27 '11 at 15:43) Pankaj Batra

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Asked: Sep 20 '11 at 11:33

Seen: 3,034 times

Last updated: Sep 27 '11 at 15:43