Nikhil Kothari
Quick Summary
We Indians are crazy on yellow metal! Ever imagined for investing in Gold? Lets understand the Gold World. The rate of 10 grams of pure 24 Karat gold was sold at Rs.1,670 in the year 1981 and it is being sold now (2020) at Rs 46,790. We were able to see a 33% price hike between 2019 and 2020. In
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FAQ :
The price of 10 grams of 24 Karat gold has seen substantial growth, rising from Rs. 1,670 in 1981 to Rs. 46,790 in 2020. There have been periods of significant price hikes, with an average annual increase of around 10% over the last 40 years.
Investing in physical gold can incur extra costs such as making charges (12-18%) and GST (3%), which add to the purchase price. It is also subject to risks like theft and potential depreciation due to wear and tear.
Sovereign Gold Bonds are government-issued schemes launched in 2015. They are issued at the current market price of gold and offer an annual interest of 2.5% to 2.75%, with redemption at the prevailing market rate after a lock-in period, typically 8 years.
When comparing a Rs. 10 lakh investment over 8 years, gold bonds are projected to yield a higher total realisable value (approximately Rs. 25.84 lakhs) compared to gold ornaments (Rs. 19.89 lakhs) and gold bars (Rs. 23.15 lakhs), after accounting for interest and avoiding making charges.
Yes, the capital gains from the redemption of Sovereign Gold Bonds are not taxable, although the annual interest received is subject to income tax. This offers a tax advantage over physical gold, where gains are taxed as capital gains.
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