Digital Gold Compare

Additional Useful Information

• Digital gold can be purchased for as little as ₹10. However, there is a daily upward limit on the amount of digital gold that can be purchased. There is no limit on the overall amount of digital gold that can be purchased.

• Digital gold comes in the form of 24k pure gold, that is actually stored in a locker in the name of the investor. Only authorized gold banks are allowed to have this locker.

• Digital gold valuation depends on the authorized gold bank selling it. Typically, the valuations are not the same, but are in a similar range as compared to physical gold. An investment fee and management fee are charged by these gold banks. However, these costs tend to be lesser than costs associated with physical gold.

• Digital gold is not regulated by the government like in the case of securities.

• Digital gold is a more efficient way of investing in gold because physical gold involves costs of storage, broker costs, etc.

Returns *

• Digital Gold does not guarantee returns. However they are subject to domestic prices of gold.

• Over a ten-year period, investing in Digital Gold has resulted into a return of 8% to 10% per annum.

Risk Level

• Digital Gold is considered as a low-risk investment.

• Gold prices are dependent on the state of the economy. In an inflationary environment, gold prices rise while during a period of low inflation, gold prices are stable or decrease. It is important to analyse the state of the economy before deciding on purchasing Physical Gold.

• Other risks such as risk of theft are eliminated.

Liquidity

• Digital Gold is considered liquid. That is because it can be easily sold at any time at prevailing gold prices.

• At any time, investors can liquidate their holdings by selling their Digital Gold to the dealer from whom the digital gold was purchased.

Interesting Facts

• Holding digital gold involves no storage costs unlike holding physical gold.

• The locker (vault), that the gold is stored in, is insured. This means that safety is guaranteed.

• There may also be an option of physical delivery of gold instead of redeeming the digital gold for cash.

• Gold is considered to be auspicious in India.

• Most platforms have a limit of ₹2,00,000 for digital gold investment.

Tax Implications

• Earnings received from Digital Gold are taxable.

• When investors sell Digital Gold, the difference between the Sale Amount and Purchase Amount is typically called “Capital Gain” or “Capital Loss” (if sale amount is lesser than the purchase amount).

• The tax that the investor must pay on Capital Gain is –
• Situation 1 – If the Digital Gold is sold within a period of 2 years from investment, the Capital Gains earned (called Short Term Capital Gains) are added to the taxable income of the investor and taxes are required to be paid based on the applicable tax slab.
• Situation 2 - If the Digital Gold is sold after a period of 2 years from investment, the Capital Gains earned (called Long Term Capital Gains) are taxed at 20% on the gains.

• There is no tax in case of “Capital Loss”.

Where To Invest

• https://www.digigold.com/buygold