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Comparison-between-Physical-Gold-and-Sovereign-Gold-Bonds-and-Gold-ETF

 

Comparison between Physical Gold and Sovereign Gold Bonds and Gold ETF

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Comparison between Physical Gold and Sovereign Gold Bond and Gold ETF- Physical Gold, Sovereign Gold Bond and Gold ETFs are one of the best investment plan for those who has interested to invest their money in gold can take their own decision on the basis of comparison as given below-

Particulars

Physical Gold

Sovereign Gold Bond

Gold ETF

Collateral

It can be used as collateral

It can be used as collateral

It cannot be used as collateral

Lock in period

No lock in period

Lock in period of 5 years

No lock in period

Return

Return is lower than the actual return on gold

Return is more than the actual return on gold

Return is Lower than the actual return on gold

Safety

It is highly susceptible to theft and burglary

It is very safe

It is very safe

Liquidity

High liquidity

Lock-in ends from 5th year

High liquidity

Wear & Tear charges

It contains high wear /tear charges

It contains minimum charges

It also contains minimum charges

Purity

Its purity is always questionable

It contains high purity

It contains high purity

Transaction charges

It contains higher charges for buying & selling in the market

It contains lower charges

It contains lower charges for buying & selling as compared to physical gold

Purchase limit

No lower limit

Minimum limit is 1 gram and maximum limit shall be 4 KG for individual/HUF and 20 Kg for trusts

Minimum limit is 1 gram and no maximum limit

Tradability/Exit

Restrictive

Tradable on Stock exchange and withdrawal from 5th year onwards

Tradable on Stock exchange

Loan Facility

Loan against physical gold can be taken from any banks or financial Institutions

Loan against Sovereign Gold Bond can be taken from any banks or financial Institutions

No such loan facility is available on Gold ETF

Tax treatment

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

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

 

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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