Gold price by Investorocean.com
What Drives Gold Prices in India – Gold Market In India?
The affinity for Gold for Indians is impenetrable and has been tested repeatedly, but the metal has proved its mettle over time. However, the price of gold is not consistent throughout and has had its share of difficulties. There are several factors, which affect the prices of gold in Indian gold market, such as:
The Gold Central Reserve In India
The central reserve i.e. the Government, when starts to hold or procure gold in their reserve, the price of the gold goes up because of increased cash flow.
Gold Volatility In India
Market volatility in terms of recession or inflation affect the price of Gold. Gold is one investment, which is not effected by inflation as a result when inflation hits, because of the liquidity factor the metal its price goes up.
Gold Interest Rate In India
An increased interest rate in the market encourages investors to acquire more cash by selling off gold, as such the amount of gold in the market increases and with increase in supply, the rate of gold can drop.
Global Market In India
As a crisis commodity, Gold is a favored acquisition for import by the government and market around the globe. More imports from global entities of Gold makes way for increased rate and vice versa.
As unlikeable as it may sound, the price of gold may very well be affected by a good monsoon – and that is because 60% of all consumption of the yellow metal is accounted by the rural sector, which primarily is dependent on a good monsoon for better crops. A decreased monsoon will tend to have excess gold in the market on lesser rate as rural India tends to sell them.
Domestic Gold Demand In India
India is primarily in love with the metal, for any occasion such as marriage, and festivals the demand of gold goes up and hence results in increased rates.
How Can You Make Gold Investments In India
Gold is many things all at once; it is versatile and is still unique in every sense. It does not amount to becoming a liability at any point because of its liquid nature and is most certainly is an asset. Investments in gold is not limited to buying gold in physical form these days you can also invest in different schemes as well.
Investing in Physical Gold In India
Investing in physical gold is buying gold in form of jewelry, coins, biscuits etc. They are the most traditional type of gold investment where you hold on to the physical asset and sell, if and when required, at a higher price.
Investing Gold ETF
Gold (Exchange Traded Fund) ETFs are like stocks and therefore implies that when you a piece of Gold ETF you also own a proportion of the total gold reserve in the market. However, any change in physical gold prices directly affects the difference of rate in Gold ETFs.
Investing in Gold Mutual Funds
Unlike Gold ETFs where you own a digital gold in proportion to the value of your investment, investment in gold mutual funds means that you own a share of the company, which directly mines the physical gold. Hence, any performance lapse in the company itself will affect your investments adversely.
GST Impact on Gold Rate In India
Before the implementation of Goods and Service Tax (GST) in India Gold was subjected to 1% service tax along with 1% VAT tax, that was a total of 2% tax. However, when GST was first introduced for Gold the making charges were subjected to 18% charge, which made a huge difference to the overall price of the gold. After, protest and government consideration the rate is distributed and reduced. With the new tax implementations in place, one has to include 3% GST on the value of the gold along with the 5% GST making charges.
The above change still has not changed the scenario of gold market in India, which remains one of the costliest nation to buy gold. Apart from this, a 10% import duty is also levied on gold imported from outside the country, and since a major portion of the jewellery manufacturing is dependent on the imported gold, the prices are soaring high. The vendors find it difficult to acquire raw gold in a decent quantity given the rates of taxes and that has resulted to buying raw gold from unregistered sources. The gold market is affected undoubtedly but the demand has not diminished to its totality. Hence, it may be presumed that the relief on GST rates may not possible in the near future.
Taxes Applicable While Buying/Selling Gold in India
In terms of physical gold, taxes on selling gold is applicable depending upon the duration that you have held them. For both short term and long terms taxes applicable are different. Long-term capital gains are subjected to 20% tax and an extra 40% cess charge. Any applicable extra charge is also levied at the time of final transaction, also, if you buy gold worth Rs. 2 Lakh or more than an extra 1% TDS is also applicable. While buying physical gold a 3% GST is levied and the price of jewellery include an extra 5% making charge.
Digital gold which is rising in popularity when it comes to investments scheme are also subjected to the same kind of taxes as for physical gold if you hold them for a period of 3 years or more. The tax of 20% along with cess and extra charges, if applicable, is not levied on digital gold held for less than 3 years.
Gold ETFs and Gold Mutual Funds are taxed at the same rate as digital gold.
Sovereign Gold Bonds are treated differently than other gold investments, since there is interest of 2.5% per annul the same is added to the principal value of the gold and hence taxed. The tax levied is dependent on the tax slab that the person falls under.
Gold Price In Maharashtra | Gold Price In Delhi | Gold Price In Karnataka | Gold Price In Telangana | Gold Price In Gujarat | Gold Price In Rajasthan | Gold Price In Uttar Pradesh | Gold Price In Madhya Pradesh | Gold Price In Andhra Pradesh | Gold Price In Bihar | Gold Price In West Bengal | Gold Price In Punjab | Gold Price In Jammu and Kashmir | Gold Price In Jharkhand | Gold Price In Haryana | Gold Price In Tamilnadu | Gold Price In Chhattisgarh | Gold Price In Odisha | Gold Price In Kerala | Gold Price In Assam | Gold Price In Chandigarh | Gold Price In Mizoram | Gold Price In Manipur | Gold Price In Sikam