Gold has always been one of the most reliable and popular investment options in India. In fact, Purchasing a gold is wedding rituals in India.
most of individuals purchase physical gold in the form of jewelry, coins, or bars from jewelry stores. This is a traditional way of holding gold and is often used for onamental purposes as well as investment. Indian women hold big portion of gold in the world in form of ornaments and gold coins it is around 11% of world’s gold. mostly all family also pass their gold ornaments to their daughters or daughter in law, its a one of the rituals in the country.
But, now days having a physical gold Storage and Safety Concerns, physical gold needs to be stored securely to prevent theft, loss, or damage. This often involves additional costs for safe deposit boxes or secure storage solutions. Moreover, keeping large amounts of gold at home can pose security risks.
Purity is one of the most concern in India, gold jewelry is typically available in 22 karat (22K), 18 karat (18K), and sometimes 14 karat (14K) purity levels. The purity is marked as a hallmark on the jewelry, indicating its gold content.
But In modern day,there are many alternatives to invest in gold.
- Gold Mutual Funds: Gold mutual funds invest in various gold-related instruments such as Gold ETFs, gold mining stocks, or global gold producers. They are managed by professional fund managers and provide diversification within the gold sector.
- Gold ETFs (Exchange-Traded Funds): Gold ETFs are exchange-traded funds that track the price of physical gold. They offer the convenience of trading like stocks on stock exchanges and provide exposure to the price movements of gold without the need for physical storage. Gold ETFs are considered a cost-effective and liquid way to invest in gold.
- Sovereign G old Bonds(SGBs): Issued by the Reserve Bank of India (RBI), Sovereign Gold Bonds are government securities denominated in grams of gold. They offer an annual interest rate and the redemption value is linked to the prevailing market price of gold. SGBs also provide capital gains tax exemption if held till maturity.
we will discuss regarding the topic of SGB:
SGBs are issued periodically by the RBI on behalf of the Government of India. The issuance periods are announced by the RBI and are typically open for subscription for a limited period.
Sovereign Gold Bonds are designed to offer investors an alternative to owning physical gold in a convenient and efficient manner. They combine the benefits of gold investment with the advantages of government securities, such as interest income and capital gains tax benefits, making them a popular choice among investors interested in gold as an asset class.
SOVEREIGN GOLD BOND ADVANTAGES:
1. In interest payment
One of the biggest Sovereign Gold Bond scheme benefits is the interest payment. The government offers a fixed annual interest rate on your SGB investment. This interest payment is divided into two parts and is paid every 6 months to the investor.
2. Paper and Demat Format
To eliminate the cost and concern of storing physical gold, the SGB is available in paper and demat format. When you invest in SGB, you do not receive physical gold but a holding certificate.
This means that you do not have to worry about the safety of gold or pay an annual fee for storing it in a bank locker. The certificate will be in your name and with zero risks of getting stolen.
3. Taxation:
The interest earned from SGBs is subject to income tax, as per the investor’s tax slab. However, the capital gains tax arising on maturity is exempt for individuals, Hindu Undivided Families (HUFs), trusts, and similar entities.
Thus, SGB is the one of the alternatives of investing in gold in these days.
further information about SGB and how and when to apply please go to the website, which connects you to thefurther guidance.