3 replies on this article “Gold fund vs etf – tax perspective”

1. kramasundar says:

   June 6, 2012 at 4:04 pm

   Hi Ashal,

   Thanks for your time.

   So you mean

   1. it is better to have gold FOF on my wife’s name who is a Resident Indian.
   2. Buy ETFs and then there is no need to pay tax, since my wife has no other income?

   Option 1 and 2 results in no tax for the gains in case of _non_ NRI investor?

   Please comment.

   Thanks,
   Ram

   Reply
   1. Ashal Jauhari says:

      June 7, 2012 at 12:24 am

      Dear Ram, Please do not understand me wrong. Taxation for NRIs in Debt funds for TDS purpose is different than RIs but the basic taxation is same that STCG or LTCG from Gold (ETF & FoFs) both are taxable.

      If you are investing in Golf FoFs using your wife’s name as proxy investor to save that TDS on the Gains part, my dear friend, you are further inviting trouble for yourself. The reason is – If you are investing your own money under your wife’s name any income generated (STCG or LTCGs from Gold FoFs) ‘ll be clubbed with your income & taxed accordingly. Although as the basic investment is in the name of wife – a RI, the TDs ‘ll not be applicable.

      Thanks

      Ashal

      Reply
2. Ashal Jauhari says:

   June 6, 2012 at 1:49 am

   Dear Kramasundar, in case of Gold ETFs, the gains are taxable but the onus lies on the tax payer to pay the tax. In case of Gold saving funds aka Gold fund of funds, the tax on gains ‘ll be deducted only from NRI investors & not from RIs. Although gains are taxable for both. Reason for taxation purpose, Gold ETFs as well as Gold FoFs both are treated as debt funds.

   Thanks

   Ashal

   Reply

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