NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Other Products
Under the Income-tax Act as applied in NISM-Series-X-B, which of the following income from physical gold held by an individual is treated as a capital gain rather than business income?
Profit from selling gold jewellery held as an investment is a capital gain, because the gold is a capital asset in the investor's hands. Gold held as stock-in-trade, making charges and commission are business or professional income.
- AProfit from sale of gold jewellery held as an investmentCorrect
- BProfit from sale of gold by a jeweller as stock-in-trade
- CMaking charges earned by a goldsmith
- DCommission earned on gold trading
Explanation
Gold held as an investment is a capital asset, so profit on its sale is taxed as capital gain. Gold held as stock-in-trade, making charges and commission are business or professional income, not capital gains.
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