Taxation on the gains made on selling any asset is based on whether the asset was held for short term or long term.

If the gold is being sold within three years from the date of purchase, then it will be considered short term, and if it is sold after three years, then it will be considered as long term.

Short-term capital gains on sale of gold is added to the individual’s gross total income and taxed at the income tax rates applicable to his/her income slab.

On the other hand, long-terms gains are taxed 20.8% (including cess) with indexation benefits. Or in other words, adjust the purchase price of gold after factoring in inflation.