Reduction of customs duties on gold and silver
In India, some people consider gold as their elder brother, while others consider it as a friend in trouble. The logic behind this is that gold remains strong all the time, be it in recession or inflation. The last few months have seen a sharp rise in gold prices. Now, due to the government’s decision, its price has come down significantly.
In the budget, the government has reduced the import tax i.e. customs duty from 15 percent to 6 percent. India remains one of the largest consumers of gold in the world. Gold is not produced in India and almost all of its trade depends on imports. Now many people don’t know which form of gold they should invest in to take advantage of this opportunity. That means you should think about investing in physical gold, ETFs or sovereign gold bonds. In today’s story we are going to tell you about this.
ETF is also an option
If you want to invest in gold for a short period of time, then gold ETF can be a better option for you. In this case, the investor can withdraw money as per his wish. You can buy and sell it as per your wish. The purchase costs in Gold ETF are less as compared to physical gold i.e. gold jewellery. Apart from this, 100 percent purity is guaranteed. There is also an option to invest through SIP. Gold ETF can also be used as collateral to take a loan.
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How beneficial is physical gold?
When it comes to physical gold, its price is exactly the same as digital gold. There are two risks involved. First, if you have a weak safe at home, there is a risk of it being robbed, whereas there is no such risk with ETFs, bonds, or digital gold. The second risk is that you will be cheated on the carats when buying in the store. If you don’t understand gold, then the dealer may sell you fake or low-carat gold pretending that it is high-carat.
The sovereign gold bond is the best for the long term
Market experts say that sovereign gold bonds are a better option for medium and long-term investors. However, there is a lock-in period of 8 years, i.e., you cannot withdraw money before that. But after the lock-in period, you get an assured return of 2.5% along with income tax exemption on maturity. Sovereign gold bonds can also be bought in rupees and are denominated in different grams of gold. The minimum investment in the bond will be 1 gram, while the upper limit of investment for an individual has been fixed (capped) at 4 kilograms. Let us tell you that this scheme was initiated by the Government of India.
