WGC: India Gold Import Duty at Decade's Lowest Level

SEATTLE (Scrap Monster): The 2024-’25 Union Budget presented by the Indian government announced drastic cut in gold import duty. The import duty on the yellow metal was cut by more than half, noted the World Gold Council (WGC).

Also, the long-term capital gains tax on gold was adjusted down and the holding period reduced. In another announcement, the government announced that profits on gold ETFs and mutual funds will no longer be taxed at the rate of short term capital gains tax if held for at least one year. The combined effects of the above changes are likely to boost gold demand in the second half of the current year by at least 50 tonnes, despite anticipated potential short-term disruptions, WGC report said.

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The customs duty on gold was lowered from 15% to 6%. Also, the duty on gold dore has been reduced from 14.35% to 5.35%. This is the highest cut in duty on record and the lowest since June 2013. The changes in customs duty are already in effect.

The holding period and rate of taxation of long-term capital gains on gold has been reduced from 36 months to 24 months. Also, gold ETFs and gold mutual funds have been excluded from the definition of “Specified Mutual Funds”.

The above decisions are likely to dent the prospects of gold smuggling into the country. The duty cut will make the gold imports via unofficial channels less profitable or even non-profitable.