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Particulars
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Physical Gold
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Sovereign Gold Bond
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Gold ETF
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Collateral
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It can be used as collateral
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It can be used as collateral
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It cannot be used as collateral
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Lock in period
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No lock in period
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Lock in period of 5 years
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No lock in period
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Return
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Return is lower than the actual return on gold
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Return is more than the actual return on gold
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Return is Lower than the actual return on gold
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Safety
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It is highly susceptible to theft and burglary
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It is very safe
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It is very safe
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Liquidity
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High liquidity
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Lock-in ends from 5th year
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High liquidity
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Wear & Tear charges
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It contains high wear /tear charges
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It contains minimum charges
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It also contains minimum charges
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Purity
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Its purity is always questionable
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It contains high purity
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It contains high purity
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Transaction charges
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It contains higher charges for buying & selling in the market
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It contains lower charges
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It contains lower charges for buying & selling as compared to physical gold
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Purchase limit
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No lower limit
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Minimum limit is 1 gram and maximum limit shall be 4 KG for individual/HUF and 20 Kg for trusts
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Minimum limit is 1 gram and no maximum limit
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Tradability/Exit
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Restrictive
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Tradable on Stock exchange and withdrawal from 5th year onwards
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Tradable on Stock exchange
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Loan Facility
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Loan against physical gold can be taken from any banks or financial Institutions
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Loan against Sovereign Gold Bond can be taken from any banks or financial Institutions
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No such loan facility is available on Gold ETF
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Tax treatment
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Long term capital gain will be taxed @ 20% with indexation benefit after 3 years of holding otherwise charged as Short term capital gain at normal slab rate
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No capital gain tax will be charged if you hold it until maturity or say redeem it after its maturity, otherwise Long term capital gain will be taxed @ 20% with indexation benefit after 3 years of holding otherwise charged as Short term capital gain at normal slab rate. Interest received thereon is taxable
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Long term capital gain will be taxed @ 20% with indexation benefit after 3 years of holding otherwise charged as Short term capital gain at normal slab rate
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