Budget 2026: ETF and Gold Tax Reforms on the Table - What to Expect

Budget 2026 has brought gold taxation back into focus. Trade bodies and market experts have asked for changes in GST on gold jewellery, import duty rules, and tax treatment for gold investment products such as gold ETFs. These demands have been placed through pre-Budget submissions and public Budget wishlists. According to The Economic Times, the gems and jewellery sector has sought duty rationalisation and a GST cut ahead of Budget 2026-27.

Why gold stays a Budget issue

Gold plays a large role in Indian household savings. A big share of demand comes from jewellery and physical holding. Gold also has a direct link with imports. This puts pressure on foreign exchange outflow during high demand phases. This is why taxes on gold, duty on imports, and rules for “financial gold” remain a policy subject.

Over the past decade, policy has tried to shift part of gold demand from physical gold to regulated products. These products include gold ETFs and Sovereign GoldBonds (SGBs). The tax system shapes this shift.

Who has raised gold-related demands

The Department of Revenue seeks suggestions on direct and indirect taxes through the Tax Research Unit (TRU). According to reports that cite the official communication, the Finance Ministry invited trade and industry bodies to send data-backed suggestions for Budget 2026-27.

The main voices in reported pre-Budget demands include export and domestic trade bodies.

According to The Economic Times, the Gem and Jewellery Export Promotion Council (GJEPC) has submitted pre-Budget recommendations that seek duty changes and policy reforms.

Separate reporting also covers inputs from the All India Gem & Jewellery Domestic Council (GJC). It has raised a GST cut demand and other tax relief points for the domestic trade.

Broader customs reform demands also feature in pre-Budget coverage. The Economic Times has reported that industry has asked for a simpler customs duty structure. The Times of India has reported that industry groups such as FICCI have flagged customs litigation and compliance pain points in pre-Budget submissions.

What changes the gold industry has asked for

GST on gold jewellery

At present, GST on gold jewellery is 3%. According to The Economic Times, the gems and jewellery sector has asked for a GST cut on gold and silver jewellery as part of its Budget 2026–27 wishlist.

Import duty and customs process

Duty and customs processes shape the landed cost of gold. Sector bodies and wider industry groups have asked for duty rationalisation and simpler customs procedures. The Economic Times has reported industry demands on customs structure simplification.

GJEPC’s submission, as covered by The Economic Times, also speaks of duty and procedure reforms for the sector.

These demands also tie to the policy goal of reducing illegal trade routes. Industry statements in media reports link duty gaps and compliance friction with informal supply chains.

ETF and “financial gold” tax rules in Budget talk

Gold ETFs sit inside the regulated market structure. They also create a clean audit trail. This suits policy goals on formalisation.

Tax rules on gold differ across products. Investors face separate rules for physical gold, gold ETFs, gold mutual funds, and SGBs. This drives compliance burden and product choice.

SGB policy is part of the same debate. The Government decision on new issuance affects how investors access gold through Government-linked paper. Moneycontrol has reported that the Centre discontinued the SGB scheme due to high cost of borrowing, and it cited a post-Budget briefing statement from February 2025.

This background has pushed the focus toward ETFs and other market instruments. It has also raised questions on what tax incentives remain for non-physical gold routes.

What “reform” means in this context

The “gold tax reforms” demands fall into three buckets.

First is the indirect tax side. This includes GST on jewellery and customs duty structure on imports.

Second is the direct tax side. This includes capital gains rules and holding-period rules across gold forms. Industry and investor voices ask for uniformity and clear classification to reduce disputes and return filing errors.

Third is product policy. This includes the future design of SGB-linked incentives and the role of ETFs in the financialisation push. The SGB discontinuation report shapes this part of the debate.

Impact on Common People

Changes in gold tax rules directly affect ordinary households that buy gold for savings, weddings, and festivals. Lower GST or import duty will reduce purchase cost and ease pressure on household budgets. Clear capital gains rules will reduce confusion when people sell gold during financial need. Support for ETFs and other financial gold products will give safer and simpler options to small investors.

Pre-Budget submissions show what stakeholders want but they do not create a Budget promise. Budget 2026 will set the final position through Finance Bill provisions and the Budget speech

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