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Gold prices hit record highs in 2025 amid geopolitical uncertainty and inflation. New tax rules remove indexation, with SGBs tax-exempt if held to maturity.
News18
Gold At Record High: The yellow metal has been hitting fresh record highs over the past few months. According to experts, several factors have contributed to this phenomenal rally in gold prices so far in 2025 — geopolitical uncertainty prompting investors to seek a hedge for their wealth, dovish central bank policies providing further support, political and fiscal instability driving safe-haven flows, elevated inflation supporting prices, and weaker currencies amplifying domestic gold rates.
With gold prices continuing to rise, investors are either hoarding the metal or looking to capitalise on the ongoing rally. The record inflows into gold ETFs reflect a renewed interest among buyers to invest in gold.
So, investors are buying physical gold, or investing in gold exchange-traded funds (ETFs).
Gold prices have surged more than 50% in the past year, fuelled by robust festive demand and sustained consumer interest in both jewellery and investment-grade gold, according to Darshika Thacker, Founding Partner of Thacker & Associates.
Anooshka Soham Bathwal- Founder & CEO of Dhanvesttor explains to News18 that for building long-term wealth, gold remains the more dependable choice. “From a portfolio management perspective, gold offers lower volatility, deeper market liquidity, and a consistent track record as a hedge during inflation or macroeconomic uncertainty. Gold’s ability to preserve purchasing power across generations makes it not just an asset, but a form of financial security something every investor, and particularly women building independent portfolios, should anchor their strategy around,” Bathwal adds.
Tax On Physical Gold, SGBs and ETFs
There are concerns of investors on tax part while investing in gold or gold-related products.
While traditional forms like jewellery and bullion continue to dominate, modern investment options such as Gold Exchange-Traded Funds (ETFs), Sovereign Gold Bonds (SGBs), and gold mutual funds have gained popularity. Purchases of gold attract a 3% Goods and Services Tax (GST) on the value and 5% GST on making charges. However, capital gains from selling gold remain taxable, except for SGBs held until maturity.
Effective July 23, 2024, major changes were introduced to the taxation of capital gains from gold investments, notably the removal of indexation benefits on gains from physical gold, Gold ETFs, gold mutual funds, and SGBs sold on secondary markets.
Under the new structure as explained by Thacker to News18:
Physical gold held for up to 24 months attracts short-term capital gains tax as per the individual’s income slab, while holdings beyond 24 months are taxed at a flat 12.5% rate without indexation.
Gold ETFs and gold mutual funds held for up to 12 months are taxed at the slab rate, while holdings over 12 months face 12.5% LTCG tax, also without indexation.
SGBs, issued by the RBI with an 8-year maturity and 2.5% annual interest, are exempt from capital gains tax if held till maturity. However, if sold earlier in the secondary market, the same 12.5% LTCG rate applies.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
October 17, 2025, 06:30 IST
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