Gold Investment: If You Invest In Pasidi, Is The Future Gold..? These Are The Rules Of Gold Investment

Gold prices are increasing with time. Indians consider it auspicious to buy gold in any form like gold ornaments, digital gold, gold bonds during the festive season. Indians’ passion for gold is not diminishing at all. However, many people may not be aware of the rules and restrictions for buying and storing gold in various forms. What are the forms of investment in gold? What are the benefits of it? Let’s know the rules and restrictions related to gold investment. Many people prefer to invest in gold instead of mutual funds, systematic investment plan and stocks. Ravi Singh, Head of Research, Share India, said in the latest circular of the Central Board of Direct Taxes that a married woman can have 500 grams of gold in the form of ornaments or ornament gold, while the limit is 250 grams for unmarried persons and 100 grams for men whether married or unmarried. If you sell your physical gold within 3 years, short term capital gains tax will be levied on it, and if you sell it after 3 years, long term capital gains tax will be levied. Short term capital gain is added to the income tax amount and tax is calculated according to the income tax slab rate.

20 percent tax on long-term capital gains and 4 percent cess are likely to add additional surcharges. An additional 3 percent GST is payable on the purchase of physical gold. Many people in India invest heavily in physical gold and gold jewellery. SAG Infotech MD Amit Gupta says that this is not the right way for investors in gold due to the amount of making charges, 3 percent GST on purchase, locker storage charges, insurance and agents’ commissions in manufacturing gold jewellery.

Digital Gold

Amit Gupta, MD, SAG Infotech said that digital gold is always better than physical gold when it comes to returns. Depending on where one is investing in digital gold, only small charges are applicable on the amount purchased along with GST. He said that there is no upper limit in the purchase of digital gold, but only up to Rs 2 lakhs can be purchased in a day. If digital gold is sold after 3 years, a 20 per cent tax on long-term capital gains plus a 4 percent cess will be added as surcharges. Digital gold returns of less than 3 years are tax free.

Sovereign Gold Bond

An individual can invest up to 4 kg per year in Sovereign Gold Bonds. In addition to the gold bonds issued by the Government of India, the bonds bought in the secondary market will be counted together in this year’s limit. However, AVP Research Commodities Amit Khare said that investments in banks and financial institutions as collateral security will not be included in this ceiling. GST is also not required to be paid on the purchase of a Sovereign Gold Bond. There are no direct charges on the purchase of these Sovereign Gold Bonds earn 2.5 percent interest per annum. This amount is added to the income tax amount and the tax is calculated according to the income tax slab rate. After 8 years the profit on Sovereign Gold Bonds is not taxed.

Gold ETF – Mutual Funds

Gold ETF – Mutual Funds are eligible for Long Term Capital Gains if they have a tenure of more than 3 years. Additional surcharges are likely to be added on long-term capital gains in addition to 20 percent tax and 4 percent cess. If sold within 3 years then short-term capital gains tax will be levied on it. Share India Research Head Ravi Singh said that short-term capital gains will be added to the income tax amount and tax will be calculated according to the income tax slab rate.

There are different types of costs and restrictions on buying investments in gold in different forms. So the best way to invest in gold is to think wisely while investing.