Things to know before investing in Gold

Many of us wants to create a passive income soured beside main source of income which should not have any risk loss. Most of the middle class people are risk averse and mostly they invest there money in PPF, FD, NPS, Gold etc.

Gold is one of the popular and safest investments being considered by people. Here I am trying to discuss some points which we should keep in mind before investing in Gold. We can invest in Physical Gold, Digital Gold, Sovereign Gold Bond (SGB).

Physical Gold

1. While buying or selling physical Gold, you will have to pay making/melting charges.
2. GST is levied on sale of Gold at 3%.
3. You will have to pay tax on Capital Gain while selling the Gold at higher price.
4. Liquidity: Highly liquid.
5. No other return other than Capital Gain.
6. Storage and security issue may arise from theft.

Digital Gold

1. No making/melting charges.
2. GST is levied on sale of Gold at 3%.
3. You will have to pay tax on Capital Gain.
4. Liquidity: Highly Liquid.
5. No other return other than Capital Gain.
6. No Storage and Security issue is the Gold is in digital form.

Sovereign Gold Bond (SGB)

1. No making/melting charges.
2. GST is not levied on sale of SGB,
3. No capital gain tax on redemption of SGB. However, tax will be changed is SGB sold in open market before its redemption.
4. Liquidity: Highly Liquid as tradable at exchange.
5. Assured 2.5% per annum payable half yearly.
6. No Storage and Security issue.