return to news
  1. Upstox
    /
  2. News
    /
  3. Personal Finance News
    /
  4. Tax
    /
  5. Old gold jewellery exchange: Will you owe tax even if you buy new ornaments?

Personal Finance News

Old gold jewellery exchange: Will you owe tax even if you buy new ornaments?

balwant jain
By Balwant Jain

3 min read | Updated on October 18, 2026, 09:08 IST

Google
SelectUpstoxas yourPreferred news source
Copy link
Twitter Page
Linkedin Page
Whatsapp Page

SUMMARY

Exchanging old gold jewellery for new ornaments may attract capital gains tax. Know how tax is calculated, what happens without the original invoice and which tax rules apply.

Old gold jewellery exchange

In case you do not have the invoice for purchase of the old gold ornaments, you can take the approximate fair market value of the gold ornaments exchanged around the date of purchase for ascertain the cost of the exchanged old gold ornaments.

Exchanging old gold jewellery for new ornaments is common, particularly during the festive season. But does such an exchange attract capital gains tax, even if you pay the balance amount by credit card? And what happens if you have misplaced the original purchase invoice for your old jewellery?

Open FREE Demat Account within minutes!
Join now

Today's Q&A explains such details in response to a query by a reader.

Question: I have purchased new gold ornaments worth ₹11 lakh against my old gold ornaments of ₹ 2 lakh. Balanced amount of ₹9 lakh is paid through my credit card. Whether this transaction, will fall under capital gains tax. Old ornaments were purchased before 2017 but old invoice is misplaced. Please advise.
Answer: Under the Indian income tax laws capital gains arises when a capital asset is transferred. For this purpose, transfer includes exchange. So strictly speaking the exchange of old gold ornament of ₹2 lakh is nothing but transfer for income tax purposes. The difference between your purchase price of gold ornaments exchanged and 2 lakh is you capital gain.

The same will be taxed as long term capital gains as these were bought before 2017 and as such were held for more than 24 months.

In case you do not have the invoice for purchase of the old gold ornaments, you can take the approximate fair market value of the gold ornaments exchanged around the date of purchase for ascertain the cost of the exchanged old gold ornaments. Since the exchange value of the same is not substantial, I do not think you need to obtain valuation report for the same.

The surplus over the fair market value of 2017 considered for exchange purpose will be your long term capital gains and will be taxed at flat 12.50%. If you opt for new tax regime, you cannot claim rebate under section 156 of Income Tax Act, 2025 which has replaced Section 87A of Income Tax Act, 1961 against the tax payable on it even if your total income including such capital gains does not exceed ₹12 lakh.

However, if you opt for old tax regime and your taxable income does not exceed five lakh rupees including these long term capital gains, you will be eligible to claim rebate under section 156 taxable income does not exceed five lakh rupees including these long term capital gains, you will be eligible to claim rebate under section 156.

Have a personal finance, mutual fund, or income tax query? We will try to get them answered by experts. Write to sangeeta.ojha@rksv.in
For all personal finance updates, visit here
Disclaimer: The views and opinions expressed above are those of respective experts/commentators and do not reflect the views of Upstox. The above Q&A is only for informational purposes and should not be considered investment or tax advice from Upstox. Please consult a tax expert for your complex tax problems.

About The Author

balwant jain
Balwant Jain is a Mumbai-based tax and investment expert.

Next Story