Is their any tax rebate if we invest in Gold Savings Fund, If yes, under income tax act which section to claim gold savings fund ?How Gold fund are treated from tax point of view???What will be benefits to investor, if one opted for Gold Savings Fund (FOF)?
Gold Savings Fund FOF) currently don't offer any tax rebate or deduction under Income tax act.
When computing income tax, gold ETFs and gold savings funds (FOF) are treated as debt funds, not equity. Tax treatement will be similar to debt funds and therefore will not attract wealth tax which is in case of physical gold.
On redemption, the units of gold ETFs and gold savings funds (FOF) held for more than a year qualify for a long-term capital gain tax of 11.33 per cent without indexation or 22.66 per cent with indexation.
If you have made a short-term gain, which applies when the holding is less than a year, the short-term capital gain will be clubbed with the income of the individual investor, to be taxed in line with the applicable tax slab of the investor.
So, the short-term capital gains will get added to your income and be taxed as per the income bracket you fall under.
Tax Treatment of Gold Savings Fund:
Long Term Capital Gain Tax of 10 % or 20 % with indexation will be applicable
Short Term Capital Gains applicable as per tax slab for the investor
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thanks for this excellent post
ReplyDeleteThanks Priya,
ReplyDeleteHappy to help you, appreciate your feedback. :)