Gold News: Gifting Gold in a Wedding? Know the Tax Impact Under the Income Tax Act

Gold News: Gold is one of the most popular wedding gifts due to its high value and long-standing reputation as a safe investment, particularly during times of global economic uncertainty. Its perceived stability and steady demand make it an excellent asset to pass forward. However, under Indian tax laws, if the value of gold gifted exceeds Rs 50,000, it is considered income from other sources and is taxable—unless it is received from designated close relatives such as parents, in-laws, siblings, or a spouse, in which case it is tax-free. Recent trends indicate an increasing interest in gold jewellery, with ICRA projecting a 12-14% increase in demand for the fiscal year 2025-2026.

Gold Gifting and Tax Implications

While rising prices have forced customers to buy less gold, for example, 10 grams instead of 20, there has also been a noteworthy movement towards purchasing gold coins and bars, with purchases predicted to climb by 10% in FY 2025-26, up from 25% last year.  This is projected to increase gold's proportion of total sales by 15%. Selling gold within three years of acquisition results in short-term capital gains tax, which is calculated according to the individual's tax bracket.  If held for more than three years, the sale is subject to a 20% long-term capital gains tax and a 4% cess. Notably, Sovereign Gold Bonds (SGBs) kept for eight years are immune to capital gains tax when redeemed, but the 2.5% annual interest received is taxable.