Let us take the case of Mayank who is a salaried employee with a private company. In the month of April, 2017 Mayank purchased gold coins and sold the same in December, 2018. Will this be a short term capital asset or a long term capital asset?

In this case gold is a capital asset for Mayank since it is owned by him as an asset and is not stock in trade for his business. This adheres to the definition of capital asset. He purchased gold in April, 2017 and sold it in December, 2018, i.e., after holding it for a period of less than 36 months. Hence, gold will be treated as Short Term Capital Asset since the time frame for long term capital asset is 36 months for all assets other than specified assets.

What if Mayank had kept a longer holding period for the gold cons. Let us assume that Mayank had bought the gold coins in the month of April, 2015 and had subsequently sold the same in September, 2018. Will this classify as a long term capital asset or as a short term capital asset?

In the above case gold is a long term capital asset for Mayank. He purchased gold in April, 2015 and sold it in September, 2018. Since the holding period is more than 36 months in this case, the gains will be treated as long term capital gains. Hence, the sale of gold bars will be treated as Long Term Capital Asset and the gains will be taxed accordingly.