Budget 2024 has reduced the holding period for capital gains on physical and digital gold to qualify as long-term capital gains from 36 months to 24 months and simultaneously cut the LTCG tax rate to 12.5%. Further, the indexation available for LTCG calculation for gold has been removed.

Gold in India is more than just a precious metal. Indian consumers have an emotional connection with the yellow metal, the significance of which comes to the fore on special occasions. With the holding period for LTCG on gold reduced to 24 months and the tax rate lowered to 12.5%, but indexation removed, does investing in gold become more or less beneficial for long-term investors? Take a look at what experts have to say.Mumbai Investment

Indexation helps account for inflationUdabur Investment. It adjusts the original purchase price of your gold upwards based on inflation, effectively lowering the taxable capital gainJaipur Investment. This means you potentially pay less tax on your investment profits.

Mohit Gang, CEO and Co-founder of Moneyfront, says, "For a very long-term investor it's a neutral trade. If one made 12% annualised returns on gold over a very long period then indexation would shave off 5-6% of that gain and remainder 6% was taxed at 20%. Which meant the tax was approximately 1.2%Pune Investment. Now with indexation gone, the full 12% gain will be taxed at 12.5% which is about 1.5%. So the overall impact on gold investors is not much. For short-term traders, lower tax incidence is good as they can easily flip their gains every 2-3 years now and invest in asset classes which are looking more lucrative in the short term.

Now look at the explanation by Divya Baweja, Partner, Deloitte India.

Date of Acquisition: 1st April 2015

Cost of Acquisition: Rs 25,700

Date of Sale : 1st July 2024

Sales consideration: Rs 72,600

Indexed cost of acquisition: Rs 36,729

LTCG: Rs 35,871

LTCG tax @ 20%: Rs 7,174

Date of Acquisition: 1st April 2015Nagpur Stock

Cost of Acquisition: Rs 25,700

Date of Sale : 24th July 2024

Sales consideration: Rs 72,600

Indexation benefit not available

LTCG: Rs 46,900

LTCG tax @ 12.5%: Rs 5,863