Tax on Jewellery Are Jewellers Paying Income Tax by Selling Gold Jewellery Already Kept in Their Shops?

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The Tax Publishers Income Tax--Tax on Jewellery Are Jewellers Paying Income Tax by Selling Gold Jewellery Already Kept in Their Shops? CA. Sanjeev Goyal As we all know that gold prices are increasing very fast. Talking about the rate of 24 carat gold in August 2023, it is Rs 6050 per gram. Whereas in March 2025, the rate of 24 carat gold is Rs 9050 per gram. Due to increase in gold prices, jewellers have to pay income tax by selling the jewellery already kept in their shops. This has become a cause of concern for jewellers these days. The situation is discussed in this article in detail. 1. Let us consider one example to understand the situation faced by jewellers A person opens a new jewellery shop in the month of August, 2023 and buys 20 kg. of gold at the rate of Rs. 6050 per gram. This was the initial investment that the jeweller made in the business. Suppose, in the month of August 2024, the jewellers sold 8 kg. of gold at the rate of Rs. 7050 (prevailing rate in the market) + Rs. 700 adding their profit margin per gram. With this transaction the quantity of gold reduces from 20 kg. to 12 kg. Because every jeweller wants to keep maximum quantity of gold in the shop, so that customers can get jewellery designs as per their choice. And that is why jeweller buy 8 kg. jewellery from the market at the rate of Rs 7050 per gram (the prevailing rate in the market at that time). Apart from the above, let us assume that the jewellers incurred expenses of running the business-like employee' salaries, electricity bill, advertisements, etc. amount to Rs. 50 lakhs. Now, if we check the fund available from the jewellers after the above transaction then the figures of funds available are as follows - SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Tax on Jewellery

Are Jewellers Paying Income Tax by Selling Gold Jewellery Already Kept in Their Shops?

CA. Sanjeev Goyal

As we all know that gold prices are increasing very fast. Talking about the rate of 24 carat gold in August 2023, it is Rs 6050 per gram. Whereas in March 2025, the rate of 24 carat gold is Rs 9050 per gram. Due to increase in gold prices, jewellers have to pay income tax by selling the jewellery already kept in their shops. This has become a cause of concern for jewellers these days. The situation is discussed in this article in detail.

1. Let us consider one example to understand the situation faced by jewellers

A person opens a new jewellery shop in the month of August, 2023 and buys 20 kg. of gold at the rate of Rs. 6050 per gram. This was the initial investment that the jeweller made in the business.

Suppose, in the month of August 2024, the jewellers sold 8 kg. of gold at the rate of Rs. 7050 (prevailing rate in the market) + Rs. 700 adding their profit margin per gram. With this transaction the quantity of gold reduces from 20 kg. to 12 kg. Because every jeweller wants to keep maximum quantity of gold in the shop, so that customers can get jewellery designs as per their choice. And that is why jeweller buy 8 kg. jewellery from the market at the rate of Rs 7050 per gram (the prevailing rate in the market at that time).

Apart from the above, let us assume that the jewellers incurred expenses of running the business-like employee' salaries, electricity bill, advertisements, etc. amount to Rs. 50 lakhs.

Now, if we check the fund available from the jewellers after the above transaction then the figures of funds available are as follows -