When gold prices rise, you may consider selling your old gold jewellery to buy new jewellery. Since gold has delivered good returns in the last few years, you may earn a substantial capital gain on selling your old gold jewellery. But even if you plan to buy new jewellery immediately with the money you get from selling your old gold jewellery, you must pay capital gains tax first. The capital gains tax will depend on the holding period and purchase and selling costs. Not just that, when you buy the new jewellery, you will also have to pay Goods and Services Tax (GST) along with making charges.
Capital gains tax, GST and making charges may eat out a significant portion of your gains from old jewellery. An expert calculation shows that on a sale of old jewellery worth Rs 10 lakh, where the holding period is more than 24 months, the approximate capital gains tax can be Rs 1.05 lakh, while on a Rs 1 crore sale value, the capital gains tax can be as high as Rs 10.50 lakh.
