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Gold Price In Kumbakonam

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Gold price by Investorocean.com

Taxes Applicable While Buying/Selling Gold

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 annum 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. 

Another Way Make Investments In Gold

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

Investing in physical gold is buying gold in form of jewellery, 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.

Gold or Gold ETF

There are several parameter on which physical gold and a gold ETF may be differentiated; these differences when considered help you to access which type of gold investments suits your plan.

Physical gold investments have been traditionally very popular but has several parameters that makes it limited as compared with gold ETFs. The purity of gold in physical gold may differ depending upon the grade of the gold but when you invest with gold ETF you your investment is directly with traditional bullions that are 99.5 purity. The price of the physical gold may rise or fall depending upon the domestic market however; ETF pricing is fixed as per the international market.

Physical gold is known for its liquidity, which allows it to be easily traded at any bank, financial institution or jewellers anywhere in the world. Gold ETFs are listed on stock exchanges, which makes it even easier to buy or sell them. Physical gold is taxable based on its holding tenure while for short term investment it is taxable as per the income tax slab and for a long term investment the gains from the physical gold investment is at 20%. While gold ETFs are similarly taxed as the physical gold for short-term gold. Whereas the capital gains from long term is taxed at 20.8%, which includes cess charges.

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