How is Digital Gold better than other forms of gold investment digitally

By Dr. Renisha Chainani, Head-Research, Augmont Gold For All

Various forms of investing in Gold in India are discussed below. Gold Futures were introduced in 2003 and Gold ETF in 2007. While SGB and Digital Gold were introduced in 2015. All the forms of gold investment have various advantages and disadvantages, it purely depends on the investor investment horizon and risk-taking ability to choose the form of investment.

Difference between is discussed below:

    Digital Gold Sovereign Gold Bond Gold ETF Gold Futures
1. Trading Hours 24*7*365 Primary Market – when RBI opens tranches 5-6 times a year.

Secondary market – Weekdays – 9 am to 3:30 pm

Weekdays – 9 am to 3:30 pm Weekdays – 9 am to 11:30 pm
2. Gold backing 99.9% 24K gold 99.5% gold 995 fineness gold 995 fineness gold
3. Minimum Investment As low as Re 1 1 gm of Gold Rs 1000 Rs 500
4. Lock-in Period None 5 years None None
5. Maximum Holding Period 5 years 8 years None Contract period expiry
6. Ease of Purchase Can be invested online through authorised partners such as popular e-wallets and other platforms. Primary Market – Can be bought from banks,

Secondary Market – Traded on Stock Exchange

Traded on Stock Exchange Traded on Commodity Exchange
7. Extra Charges then cost None None Annual AMC Charges 0.5-1% Mark to Market Margin
8. DEMAT Account Required No Yes Not compulsory Yes
9. KYC Very Minimal KYC up to Rs 2 lakhs investment Detailed KYC Detailed KYC Detailed KYC
10. Regulated by Independent Trustees RBI SEBI SEBI
11. Market Liquidity Highly liquid Illiquid Highly liquid Highly liquid
12. Redemption option in Physical Gold Yes Yes after 8 years No Yes, after contract expiry

Similarities :

  1. GST Payment – 3% GST is levied on buying gold in any form.
  2. Delivery and Making Charges – While opting for delivery of gold in physical form, the investor has to pay delivery and making charges.
  3. Taxation — Gains on gold assets held for less than 3 years are taxed at the investor’s marginal tax slab rate. Gains on investments with a holding term of more 3 three years are taxable at 20% with indexation benefit.




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