Moment guide · FY 2026-27
I'm selling gold or sovereign gold bonds
How is capital gains tax on gold, gold ETFs and SGBs calculated in FY 2026-27?
For physical gold, coins and jewellery held over 24 months, LTCG is taxed at 12.5% with no indexation; under 24 months, gains are taxed at your slab rate. Gold ETFs and gold mutual funds are specified mutual funds, so redemption is taxed at slab under section 50AA no matter how long you held them. SGBs held to maturity are exempt for individuals/HUFs, but a secondary-market sale after 12 months is LTCG at 12.5%.
Your legitimate options
Every route the statute actually gives you — with its condition, cap and deadline.
| Route | Condition | Cap / deadline |
|---|---|---|
| Physical gold / jewellery LTCG | Held more than 24 months | 12.5% with no indexation |
| Physical gold / jewellery STCG | Held 24 months or less | Slab rate |
| Gold ETF / gold mutual fund redemption | Any holding period — specified mutual fund under s.50AA | Slab rate, no LTCG rate or indexation |
| SGB sale before maturity | Held more than 12 months | LTCG at 12.5%, no indexation |
| SGB maturity redemption | Held to maturity (8 years) by individual/HUF | Exempt under s.47(viic) |
The #1 trap
Do not treat gold ETFs or gold mutual funds like physical gold — after s.50AA their redemption is taxed at slab rate regardless of how long you held them; only physical gold/jewellery and SGB secondary sales get 12.5% LTCG without indexation, and only SGB maturity is fully exempt.
The decision path
Follow it top to bottom — the first condition that matches is your answer.
Worked example
Meera, creative director and retail investor
Meera bought 200 grams of gold in January 2020 at ₹4,400 per gram for ₹8.80 lakh, plus 1.5% making charges on jewellery that cost her ₹12 lakh total when bought in 2020. In March 2026 she sells that jewellery at ₹7,100 per gram, receiving about ₹14.20 lakh for the gold content. Holding period is over six years, so the gain is long-term. Under pre-FA-2024 rules she could have used indexation and paid tax at 20%; for FY 2026-27 that route is gone. Her LTCG is approximately ₹14.20 lakh minus the indexed-ineligible cost of ₹8.80 lakh = ₹5.40 lakh. At 12.5%, the tax is ₹67,500 (plus applicable cess). There is no cost inflation index adjustment anymore. Separately, Meera owns ₹2 lakh of Sovereign Gold Bonds issued in January 2019. They mature in January 2027. Because they are redeemed at maturity by an individual, the redemption is exempt under section 47(viic). She is often tempted to sell them early to book a ₹60,000 gain, but she checks: selling in the secondary market after holding more than 12 months gives LTCG at 12.5% — ₹7,500 tax on the ₹60,000 gain — while holding to maturity keeps the entire gain tax-free. She decides to wait. She also holds a small gold ETF bought in 2021 at ₹62 per unit; units now trade at ₹88, a gain of ₹26 per unit. Because gold ETFs are specified mutual funds under section 50AA, the redemption gain is taxed as short-term capital gain at her slab rate — about 30% plus cess — even though she held for five years. She compares keeping the ETF versus switching into SGB via the next tranche, and realises the SGB route is more tax-efficient if she can hold to maturity. One trap she avoids: believing the ₹1.25 lakh section 112A threshold applies to gold. It does not — 112A covers listed equity and equity-oriented fund units, not physical gold or gold funds. A quick call with us dials in the final figure.
Questions people actually ask
Sections: 112A, 50AA, 47(viic), 50(2) · Last verified 2026-08-11 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).