Different avenues to invest in Gold !!

Posted on Dec. 6, 2023, 6:30 p.m.
by Vilas Shetty

Gold should form at least 5-10% of your overall portfolio (higher if risk averse investor) for the
purpose of diversification & maintaining the health of portfolio even in times of crisis.


Here are list of avenues where you can invest into Gold along with their Features, Additional Charges & Taxation to take informed decision on which instrument is best suited for you.

 

Format

Features

Additional Charges

Taxation

Gold Jewelry

Used Primarily for
Personal Use.

Making Charges,
Locker fees for Storage and safekeeping.

If sold before 3 years,
profit is added to your
income. Long term capital gain tax of 20% with benefit of indexation

Gold Bars, Coins

Can be used for
Investment

Zero or minimal
making charges. Locker fees for storage and housekeeping

Same as gold jewelry

Gold ETF

Can be bought and sold electronically on the stock exchange. Can be
bought in units of 1 gram worth of gold.

Brokerage, fund
management charges, and demat fees. You may be charged exit load of 1% or more if you sell before 1 year

If sold before 3 years
profit to be added to your income and taxed
accordingly. Long Term
capital gain of 10%
without indexation and
20% with indexation

Gold FOFs

Mutual Fund that invest in Gold ETFs

Brokerage fees and
management fees. You may be charged an exit load of 1% or more if you sell before 1 year

Same as Gold ETFs

Digital Gold or
e-gold

Can be used to safely accumulate digital gold and take physical delivery when needed.

Storage fee, GST,
delivery charges, convenience fee as per the platform from which you buy e-gold. Minimal brokerage charges

If sold before 3 years, the profit to be added to your income and pay tax as per your income slab. If sold after 3 years, long term capital gains tax of 20%
with benefit ofindexation

Sovereign
Gold Bonds

Earns additional interest of 2.5% per year.

None

Interest earned is taxable. Exempt from Capital gains tax if sold on maturity. If transferred before maturity, they attract long-term capital gains tax with benefit of indexation.