Question: is the tax liability of capital gain arises, if someone invest in gold bonds.?
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Answer #1:
Bonds, whether denominated in dollars or gold, are a pending disaster.The value of bonds is inversely related to interest rates. A tax exempt treasury bond could go from 3% to 6%, losing 50% of its value.
The best way to buy gold-related securities is to buy non-US gold mining companies. They pay roughly $400 per ounce to mine gold which sells for about $1200. Even at $900 or $1000 per ounce, they make historically high earnings.
Non-US? That's an inflation hedge. Canadian and Australian dollars should hold their values better than the American dollar, which should stay stronger than the British Pound or Euro.
IAG and SEMFF are good Canadians. BHP, Australian, is larger and more diversified. FCX is stronger on copper. SLW is stronger on silver.
FRG, Canadian, also mines uranium.
Incidentally, the entire annual gold production, worldwide, is about 50 million ounces. If 50 million Indians purchase one ounce apiece, they would absorb an entire year's volume.
Answer #2:
If you are talking about Gold ETF, then yes the capital gain arising out of investment in gold ETF is subject to tax. STCG (holding period < 1 year) will be taxed as per the tax slab of the investor; while incase of LTCG (holding period > 1 year) it will be taxed as @ 10% without indexation and @ 20% with indexation.** Powered by Yahoo Answers
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