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Business News/ News / India/  Budget 2023: Physical gold conversion to e-gold receipt not to attract capital gains tax

The government on Wednesday said there will not be any capital gain tax if physical gold is converted to an Electronic Gold Receipt (EGR) and vice versa. Announcing this in her Budget speech for the 2023-24 fiscal, finance minister Nirmala Sitharaman said that not treating conversion of gold into electronic gold receipt and vice versa as capital gain. 

“The conversion of physical gold to Electronic Gold Receipt (EGR) and vice versa is proposed not to be treated as a transfer and not to attract any capital gains. This would promote investments in electronic equivalent of gold," Sitharaman said in her Budget 2023 speech on Wednesday.

EGRs are depository gold receipts traded on the stock exchanges. Under this form, investors buy the gold in dematerialised form and are given gold receipts instead of physical gold. The BSE was the first stock exchange to launch EGRs on its platform.

Gold prices today climbed to a new life-time high of 58,060 per 10 gm on Multi Commodity Exchange (MCX). Gold future contract for February 2023 started rising amid budget speech of Finance Minister Nirmala Sitharaman and went on to climb to its record high by the time FM finished her speech in the parliament. The FM proposed to increase the import duty on silver Dore, bars and articles to align them with that on gold and platinum.

Nirmala Sitharaman on Wednesday raised the personal income tax rebate limit, doled out sops on small savings and announced one of the biggest hikes in capital spending in the past decade as she did a tight rope walk in the Budget between staying fiscally prudent and meeting public expectations in the year before general elections.

Check all Income Tax announcements here

The personal income tax rebate limit has been increased to 7 lakh from the fiscal year starting April 1 under the new tax regime from the previous 5 lakh. Tax slabs has been cut to 5 from 7 earlier. Also, the maximum income tax rate has been reduced to about 39% from 42.7% after a reduction in the highest surcharge to 25% from 37%.

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Updated: 01 Feb 2023, 04:33 PM IST
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