How investments in gold ETFs or gold exchange traded funds are taxed
Gold ETFs are taxed as debt funds
For investments less than 3 years, your capital gains get added to your income, and get taxed at your income tax rate
For investments of more than 3 years, the capital gains are long term capital gains
You pay long term capital gains tax of 20% which is lower than the rate of 30% for the highest income tax slab
The long capital gains for tax purposes also get lessened since cost of acquisition gets enhanced due to inflation indexation
Thus, you get a double benefit of lower tax rate and lowered capital gains thanks to inflation indexation