How are gold ETFs taxed in India?

Gold ETFs are treated as capital assets for taxation. The type of capital gain (STCG vs LTCG) depends on how long you hold the ETF before you sell it:

Short-Term Capital Gains (STCG)

Applies if you sell the gold ETF within 12 months of purchase.

The gains are added to your total taxable income and taxed at your regular income tax slab rate (plus surcharge and cess ).

No flat rate or indexation benefit applies for STCG.

Long-Term Capital Gains (LTCG)

Applies if you sell the gold ETF after holding it for more than 12 months.

The gains are taxed at a flat rate of 12.5% (plus surcharge and cess), without indexation benefit.

This 12-month rule applies for units purchased on or after 1 April 2025 under the current tax rules — older purchases may have different transitional rules but for most new investors the 12-month period applies.

Example:
If you buy a gold ETF in July 2025 and sell in February 2026 (within 12 months), any profit is taxed at your income slab rate (STCG). If you sell in August 2026 (after 12 months), the gain is taxed at 12.5% (LTCG).

Note: These rules are as per FY 25-26 tax rates and are subject to change by the government in future budgets. As an investor, you should always check the latest tax provisions before investing.

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