Best ways to Buy Gold in India

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Best ways to Buy Gold in India

We can invest in Gold in India as e-Gold, Gold Coin, Gold jewelery, buying the shares of companies related to Gold from the Stock markets, Gold futures, Gold bullion. Which is the best investment in Gold? This is the question asked by many Indians who want to invest in Gold in India. Go through the table below to find out the answer for the question. Each category of investment in Gold in India has their own merits and de merits. In one attributes If Gold coin fares better, then in another Gold ETF or e-Gold. All in all e-Gold and Gold ETF are the best investment in Gold in India according to me. Then Gold coin followed by Gold Jewelery. Other investments like investing gold related stocks in stock market is not considered because it is a riskier mode of investing in Gold in India.

 

Comparison of Gold Ornaments, Gold ETF, Gold Coin, E-Gold

Attributes	Gold Ornaments	Gold ETF	Gold Coin	e-Gold
Purity of the Gold	9 Carat to 24 Carat	995.0% (24 carat)	999.9% (24 carat)	995.0%
Impurity Risks	Possible	No	No	No
Cost of Purchase	Market price of the Gold on the date of purchase & Making charges which varies from 2% to as high as 15% depending upon the works gone into making the jewelry.	1)Market price of the Gold. 2)Brokerage charge of 0.05% to 1 %depending upon the Broker.	1)Market price of the Gold 2) Vat-1% 3)Premium charged by the respective banker on the price of the Gold on that day.	1) Market price of the Gold 2) Brokerages range start from 0.25% 3) Transaction charge limited to Rs.1/gm
Storing charges	Almost nil If kept in bank lockers, locker fee should be paid which ranges from Rs.100 to Rs.1000.	1)Annual maintenance charges. Rs.100 to Rs.900 2)Annual recurring expense charged by ETF manager. 0.25% to 1% of the total value of investing.	Locker charges which may range from Rs.100 to Rs.1000 depending upon the Bank	Annual maintenance charges which range from Rs.200 to 500
Sources of Purchase	From Jewelers from all over the country	From the stock exchanges like NSE and BSE	1.) Banks 2.) Post office 3.) Jewelers 4.) Non Banking financial agencies	From the trading platform run by NSEL
How to buy	From jewelry shops from all over the Country	Open a Demat and Trading account with Brokers and start buying	Carry Pan card for purchase above Rs.50000. Approach any of the above sources	Open a demat account with brokers approved by NSEL Then logging into the trading platform any buy as you like.
Demat account	No	Yes	No	Yes
Units of Purchase	Gm	1 gm. Except in Quantum ETF which starts from 0.5gm.	0.5gm, 1gm, 2gm, 4gm,8gm, 10gm, 50gm, 100gm and even 1kg are available.	1 unit which is equal to 1gm.
Taxes payable on buying selling	VAT+ Sales tax	No security transaction tax. Brokerage and other charge just like you pay for equity is applicable.	VAT @ 1% for Gold Coin in India.	1) Brokerages range start from 0.25% 2) Transaction charge limited to Rs.1/gm
How to sell & Where to sell	You can sell it to any Jewelers	You can sell it at the Exchanges.	Hard to sell Bankers won't take back Gold coin. You can sell it to Jewellers	Sell the units in the trading platform run by the NSEL. You can convert e-Gold to physical Gold.
Return on Selling	If the ornaments are of 916% or Hallmarked, then Market price on that day. You will lose the making charges that you paid at the time purchase	Market price of the Gold on that particular day. Provided the ETF that you hold has enough liquidity in the Exchanges. In a situation of scarce volume you have to reduce your price of selling.	Market price of the Gold You have to forgo the premium charged by the bank at the time of purchase.	Market price of the Gold on that day If you are converting it to physical Gold,, then you have to fork out 1%VAT and 1% as Making charges of Gold coin.
Annual Charges	Locker charges Rs.100 to Rs.5000 depending on the size of the Locker	1% to 2% depending on the company	Locker charges	Annual maintainance charges which range from Rs.200 to 500
Fear of theft	High, if no lockers are available	No. Security is taken care by the Fund	High, if not stored in Lockers	Nil.
Liquidity	High, You can even pledge your ornaments to banks and financiers	Moderate. Depends on the volume traded in exchange for the particular ETF	Low	High. Volume is picking up in the NSEL trading platform.
Wealth tax	yes	No	yes	yes
Short term capital gain tax	First 3 years	Before One year.	First 3 years	First 3 years
Long term capital gain tax	After 3 years	After One year	After 3 years	After 3 years
As an Investment	No	Yes	Yes	Yes
Charges to Investment ratio	High	Low	High	Lowest
If the value of Gold stays static for 3 years	Investment decreased in value by making charges and locker charges if any	Investment decreased in value by annual maintenance charges and brokerages and Annual recurring expenses charged by the ETF manager	Investment decreased in Value by the Locker charges and premium charged by the Bank from where you purchased the Gold coin	Investment decreased in Value by the annual maintainance cost and brokerages

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