NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Other Products
Mr. Iyer bought physical gold jewellery for Rs 3,00,000 and sold it after 30 months for Rs 4,50,000. Assume LTCG on such an asset is taxed at 12.5% without indexation, health and education cess is 4%, and ignore surcharge and other income. What is his total tax on this gain?
The tax is Rs 19,500. Gold held for over 24 months gives a long-term gain of Rs 1,50,000, taxed at 12.5% which is Rs 18,750, and 4% cess of Rs 750 is added. Omitting cess or using a higher rate gives wrong figures.
- ARs 18,750
- BRs 19,500Correct
- CRs 31,200
- DRs 46,800
Explanation
Physical gold held more than 24 months is long-term. The gain is 4,50,000 - 3,00,000 = Rs 1,50,000. Tax at 12.5% is Rs 18,750, and adding 4% cess of Rs 750 gives Rs 19,500. Rs 18,750 omits cess, Rs 31,200 uses a 20% rate with cess, and Rs 46,800 uses a 30% rate with cess.
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