Gold jewelry cannot be considered as an investment. Though the gold can be liquidated at future gold price, the overheads like making charges, wastage etc is very high @ 20-25%, thus making it an unviable investment.

One can buy gold up to Rs 2 lakhs in cash. As per Income Tax laws, recipient can not accept Rs 2 lakhs or more in cash for a single transaction. One needs to provide PAN number, Aadhar etc. for purchase of gold above Rs 2 lakhs.

Hallmarking is a certification of purity accredited by the Bureau of Indian Standards (BIS).

It is a guarantee of the purity of gold purchased.

While buying gold, check for:

• BIS mark (denoted by a triangle)
• the caratage (22K915) that shows the purity of gold
• The mark of the jeweller
• Mark of the Assaying and Hallmarking Centre (AHC)

For those who have old un-hallmarked jewellery

• • Get the jewellery hallmarked by a BIS registered jeweller
  • Get the jewellery tested by any BIS recognised Assaying & Hallmarking Centre
    • Customer can directly get the jewellery tested at any recognised Assaying & Hallmarking Centre
    • A test report will be provided that will assure the customer of the purity of jewellery
  • Gold jewellery hallmarked with old symbols need not be re-hallmarked with the 6 digit alphanumeric code.

Pros of 14 carat gold:

• Affordable
• Can be bought online on platforms like Amazon, Flipkart, etc.
• Lifetime exchange policy wherein gold will be valued at the prevailing prices for that purity by the company

Cons of 14 carat gold:

• Some companies levy handling charge (around 2%) on 14 carat gold jewellery
• Can not take loan against gold

Gold if sold after 3 years is applicable to long term capital gains tax. The sale price needs to be reduced by indexed cost of acquisition (or purchase price) to arrive at capital gain. This capital gain would be taxed at 20%.

However, if the amount is reinvested in purchasing a house, the amount re-invested can be claimed as exempt from tax under Section 54F.

Gold if sold before 3 years is applicable to short term capital gains tax. The short term capital gains are added to income and taxed as per your applicable tax slab rate.

There is no tax applicable when one inherits gold or receives gold as a gift from blood relatives.

Upon selling the inherited gold and making profits, one needs to pay capital gains tax as below:

If sold within 3 years – Short term capital gains applicable on the gains – added to income and taxed as per applicable tax slab.

If sold after 3 years – Long term capital gains tax applicable at 20% (with indexation benefits)

Gold jewellery schemes offered by jewellers allow individuals to make regular contributions towards purchasing gold in the future.

Demerits of Gold jewellery schemes:

• You can buy mainly Gold jewellery and not gem stones / special jewellery / coins / bars
• Jewellery can be purchased only from the same jeweller
• The invested amount cannot be redeemed for cash
• The lower making charges are lower only for select designs
• Not a regulated investment market, hence risk of fraud by the Jeweller.

The benefits are long term store in value since gold will always have value, hedge against inflation, liquidity, no specialized knowledge required and helps to diversify the investment portfolio.

The factors affecting gold prices include inflation, government gold reserves, jewellery market, interest rate trends, and the global movement in gold prices.

The factors to consider are:

Performance – The performance of gold funds, ETFs and bonds are different from physical gold. Also, it is important to consider the gold price and factors affecting it.

Security – Physical gold should be stored in a safe and secure place.

Portfolio Diversification – Most of the time, the price of gold moves inversely to the stock markets. It is important to design the portfolio keeping the market trend and economic uncertainties in mind.

No, gold is not a passive investment options like Fixed deposits, bonds etc. Income from gold can only be availed once it is sold in the open market.

No, banks in India do not buy the gold coins and bars. These physical gold assets can only be sold to jewellers and retailers related to this industry.

Yes, the Indian gold prices are influenced by international markets and conditions.

The bond’s maturity period is for 8 years. However, you can choose to exit the bond from 5thyear onwards (only on interest payout dates).

The bond’s maturity period is for 8 years. However, you can choose to exit the bond from 5thyear onwards (only on interest payout dates).

Yes, a customer can apply online through the website of the listed scheduled commercial banks. The issue price of the Gold Bonds will be Rs 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

The current interest rate for SGB is 2.50% annually. Returns are linked to the current market price of gold.

Eligible investors include individuals, HUFs, trusts, universities, charitable institutions.

Yes, joint holding is allowed.

Yes. The application on behalf of the minor has to be made by his / her guardian.

You can view it in your demat account.  In case of online applications, the certificate of holding is emailed to the customer by the depository.

The customers will be issued Certificate of Holding on the date of issuance of the SGB. Certificate of Holding can be collected from the issuing banks/ SHCIL offices/ Post Offices/ Designated stock exchanges/ agents or obtained directly from RBI on email, if email address is provided in the application form.

The Bonds are issued in denominations of one gram of gold and in multiples thereof.

Minimum investment in the bond is two grams

Maxiumum buying limit is 500 grams per person in a fiscal year (Apr to March).

The bonds are tradable on stock exchanges from the date to be notified by RBI. The bonds can also be sold and transferred as per provisions of Government Securities Act.

Interest on SGB is taxable as per the income tax slab of the investor. Long term capital gains on SGB is 20% with indexation benefit. Short term capital gain will be applicable if the bonds are sold within 3 years from the purchase date and will be taxed as per the applicable tax slab.

TDS is not applicable on the bond. However, it is the responsibility of the bond holder to comply with the tax laws.

Indexation benefit is available on long term capital gains that may accrue on sale of the SGB before maturity.

SGBs are a superior alternative to holding physical gold. The risks and costs of storage are eliminated. Investors are sure of the market value of gold during maturity and they get periodical interest. SGBs are also free from issues like making charges, wastage and purity and can be documented in Demat form.

No, an investor can have only one unique investor ID. The ID can be used for all subsequent investments in the scheme.

The interest rate is 2.5% per annum. Interest is credited semi annually to the investor’s bank account and the last interest is payable on maturity.

Yes, SGBs can be used as a collateral for loans.

Yes, nomination facility is available and a nomination form is available along with the application form.

Yes, investors can freely transfer these bonds to others through demat form, provided they meet the required eligibility criteria, such as individuals, HUFs, trusts, universities and charitable institutions

Yes, these bonds can be traded on stock exchanges as per the guidelines of the RBI

Investors get ‘Certificate of Holding’ generated from e-Kuber portal of RBI.

Alternatively, units are allotted in demat account mentioned by investor in the subscription form.

Premature withdrawal of the bonds is permitted after five years of the issue or can be sold on the secondary market

To see the SGB that is purchased online:

• If an individual has purchased the SGB through a stockbroker, he can view it in his demat account
• An individual can also login to the bank or brokerage firm’s account
• He should go to the portfolio/holdings section and search for the Sovereign Gold Bonds category.

It may take a week or two for SGBs to appear in the portfolio, once they are issued.

An individual can also check the SGB allotment status by looking for the certificate of holding from the issuing bank, post offices or designated stock exchanges. Also, he should check the mail for confirmation. The RBI will also share a digital copy of the certificate through mail.

If an individual has purchased the SGB offline, he can collect the certificate of holding from the issuing bank, designated stock exchanges, post offices, SHCIL offices and agents.

The RBI will also share a digital copy of the certificate on mail.

Investors can purchase SGBs from the stock exchanges like National Stock Exchange and Bombay Stock Exchange. They have the option to buy SGBs from the primary market when the government declares subscription periods or through the secondary market by trading on the stock exchange.

The price of SGBs in the secondary market is mainly impacted by supply and demand. NSE website provides a detailed guidance on SGBs in the FAQs sections. As per the guidelines, SGBs are authorized to trade in the stock exchanges on a particular date announced by the RBI.

SGBs held in demat form with depositories are eligible for trading. To purchase SGBs through the stock market:

1. An individual should identify discounted or high yielding SGBs on the NSE and BSE
2. He should locate the SGB scrip code in the demat account and place the buy order for the desired quantity
3. The purchased SGBs will be credited to the demat account within a working day of the transaction

SGBs can be purchased from the secondary market anytime through NSE or BSE. Online purchase allows the investor to pay Rs. 50 less than the nominal price.

Here is the process to buy SGBs online:

1. Scheduled commercial banks offer primary issuance of SGBs. An individual can log into the net banking account.
2. He should choose the e-services option and select sovereign gold bonds
3. Before selecting the proceed option, he should read the terms and conditions
4. The registration form should be filled in and submitted
5. Subscription quantity is entered in the purchase form beside nominee details
6. Individual should select the submit option

Here is the offline process to buy SGBs offline:

1. An individual can invest offline through designated banks, post offices, the Stock Holding Corporation of India Limited and the authorised stock exchanges, directly or through their agents
2. To start the investment, the forms can be downloaded online or availed through these financial institutions
3. The form should be filled in and attached with the relevant KYC documents
4. Cash payments upto Rs. 20,000 can be made. Payment can also be made through cheques or demand drafts.

The price of SGBs in the secondary market varies because of supply and demand, and market sentiment towards gold prices.

Here are the factors that can affect the SGBs price in the secondary market:

1. New issues – When RBI issues new SGBs, sellers in the secondary market may offer discounts to attract buyers
2. Trading volumes – Low trading volumes in the secondary market may require sellers to sell at a discount to attract buyers
3. Market sentiment – Market sentiment towards gold prices and market dynamics can affect the price of SGBs in the secondary market

Currently, SGBs are trading at a premium of 7% to 8% in the stock market because of the anticipation that new SGB tranches will not be announced by the government.

No, SIP is not allowed in SGBs. We can buy SGBs on the stock exchange.

Advantages of Gold ETF:

Digital: can be bought online and kept in a Demat form

Scalable: can be bought in smaller units

Transparent: tracks the price of the gold

Liquid: can be liquidated at any point of time on exchange

No. It is taxed as capital gains.

The minimum amount is one unit of gold which is equal to one gram of gold.

Investing in Gold ETFs include asset management and brokerage charges.

Yes, a Demat account is required.

Any changes in the price of gold directly affect the prices of Gold ETFs.

The investor does not need to carry or store any physical gold. Hence, there is no risk of theft.

No, Gold ETFs are not affected by stock market fluctuations.

No, SIP option is not available.

Yes, Gold ETFs are listed and traded in the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). A Demat account is required for investment.

Yes, Gold ETFs can be used as a collateral for taking a loan.

Gold ETFs are basically units representing physical gold. They can be in the form of dematerialised nature. One Gold ETF unit is equal to one gram of gold.

Yes, the price of a Gold ETF is directly proportional to the price of physical gold. A Gold ETF is a fund that holds gold assets, such as gold bullion with a purity of 99.5%. The ETF price is directly linked to the gold price. If the price of gold increases by 2%, the price of ETF will also increase by 2% approximately, keeping in mind the management and trading costs.

Gold ETFs allows investors to gain from future price rises without holding physical gold. It is less expensive than physical gold and easier to liquidate. Minor tracking errors can happen sometimes when the ETF price deviates from the gold price. When this happens, arbitrageurs quickly step in.

ETFs are reflected in a demat account under the data pages, which can include indices, mutual funds, and a market dashboard.

Here are the things to keep in mind while purchasing Gold ETFs:

Expense ratio – This is the annual fees for managing the investment like trading cost, which affects the returns. Lower expense ratios lead to higher returns.

Tracking error – This measures the ETF’s performance with the benchmark it mirrors. A lower tracking error is better.

Trading volume – It is better to choose funds with a higher trading volume

Gold loan is a secured loan taken from a lender by pledging gold jewellery or coins as collateral.

Gold loan is preferred over Personal loan as interest rates on gold loans are lower than personal loan.

One can take a loan of up to 90% of the value of pledged gold.

Only the gold component of ornament is considered for calculating the value of gold. Other metals, stones and gems are not included.

The various ways by which one can repay gold loan are:

• Paying only the interest monthly. Prinicipal amount to be paid fully at maturity
• Regular monthly EMI’s towards principal and interest
• Bank charges monthly interest but principal along with entire interest amount to be paid at the end of the loan tenure
• Partial or full payments of both interest and principal components can be made anytime during the loan tenure. Not required to service the EMI schedule. Interest is charged only on outstanding loan amount
• Overdraft facility against the pledged gold. Monthly interest to be served for borrowing the amount from the overdraft account

On failure to repay gold loan, bank will levy late fee as penalty.

1. Penalty fees are approximately around 2% per annum over and above the applicable rate of interest.

If unable to repay the loan even after reminders, pledged gold may be seized and auctioned by the bank.

Generally, foreclosure charges of upto 2% + GST is charged if loan account closed within 3 – 11 months

No foreclosure charges, if closed after that.