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Income tax notice can be issued if 'negligence' in buying and selling of gold

Tuesday - August 27, 2019 11:10 am , Category : BUSINESS
Keep a bill for the purchase of gold or its jewelry
Keep a bill for the purchase of gold or its jewelry

Know the 'precautions' when buying and selling gold!

AUG 27 (WTN) - Everyone is aware of the fascination for gold jewelry among the Indian people. In India, gold is considered as status symbol. Not only this, gold is considered to be the biggest help in adverse economic conditions in India. Buying and selling gold is a common process in India. But for your information, let you know that there are some rules for buying and selling gold. It is very important to know the rules of selling and buying gold, because there is a tax on buying and selling gold in excess of the prescribed quantity.

It has been observed that small scale traders of gold do not follow the rules while selling and buying gold and its jewelry, and due to lack of awareness among the public, traders of gold jewelry buy and sell gold on their own terms in India. It has been observed that customers are cheated many times at gold shops. Today we tell you what are the rules of buying and selling gold and its jewelry, and what kind of taxes a customer has to pay on this, and if you do not pay this tax, then you can also get a notice from the Income Tax Department.

According to the experts, payment can be made with cash, net banking, debit card or credit card while buying gold and its ornaments. You can’t buy more gold than a fixed amount in cash. For your information, let you know that after implementation of the GST, while making gold jewelry, the cost of making these is to be paid, and which is about 3 per cent of the total gold price.

There is a tax to be paid when selling gold and gold jewelry. The tax levied on selling gold depends on how long the person has kept the gold or its jewelry after buying. On this basis, there is a Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG) tax is applicable.

If a person sells gold or its ornaments within 36 months of purchase, then the concerned person has to pay Short Term Capital Gains tax on the increased value of the gold or ornaments purchased. The benefit of the person concerned after selling gold or its ornaments, is added to his total income. After that, while filing the income tax return, the income tax of the concerned person applicable in which tax-slab, accordingly the concerned person has to pay income tax.

On the other hand, if it has been more than 36 months since the purchase of gold or its jewelry after purchasing, then the Long-Term Capital Gains tax has to be paid on its increased value. Long-Term Capital Gains tax has been different in different financial years for the past few years. After paying this tax, the benefit that a customer gets from selling gold or gold ornaments is added to his total income and then Income tax is calculated on this income.
At the same time, our advice to you is that whenever you buy gold or its jewelry, you must take its bill and keep the bill. Always ensure that the bill should contain all the information about the purity, weight and price of gold or its jewelry. You can sell gold to goldsmiths at minimum deduction when you have a bill of gold or its jewelry. If you do not have a bill for gold or its jewelry, then the goldsmith can buy it from you at an arbitrary rate, which can cause you loss.

If you are buying gold or its jewelry, then you should know that what the purity of the gold is that you are buying. It is seen that most goldsmiths give priority to buying 22 carat gold. For your information, let you know that 915 hallmark is marked on such gold. For the information about which carat your gold jewelry belongs to, you should check it so that you know what the quality of your gold jewelry is, and you can sell it on the same basis.