On the tax front, gold ETFs and gold mutual funds may lose out on the new gold EGR

“Securities listed in Section 112 of the Income Tax Act, 1961 have a rate of 10%. Although Gold ETF units are excluded and 20% LTCG tax rate with indexation is applicable to Gold ETFs. EGR units are not, But the listed ones, said Gautam Nayak, partner at CNK & Associates LLP, “would qualify for both the 1-year as well as the 10% LTCG rate unique ETFs, which lose out on both fronts.” “Capital in Listed Gold EGR The benefit will be eligible for a longer period if the EGR is held for more than 12 months, as is the case with any other listed security. However, the LTCG rate on them will be 20% with or without the benefit of indexation at 10%. “Indexing the cost, whichever is more beneficial to the investor”, said Amit Patel, partner at Manohar Choudhary & Associates and former president of the Bombay Chartered Accountants Society (known as BCAS).

Bengaluru-based chartered accountant Prakash Hegde took a more cautious approach. He asked the assessees to proceed with caution and assume the holding period of 36 months till more clarity comes from the government. “If the electronic gold receipt or EGR is notified as securities by the central government, the holding period for levying long term capital gains would be 12 months as they would be securities listed on recognized stock exchanges,” he said.