Issue period is from 18th December to 22nd December 2023.
Should you apply ?
Our rationale is summarized in this short note.
We believe SGB is one of the best ways to invest in Gold & here are our reasons to choose SGBs
100% Tax free on capital gains when held till maturity.
Additional 2.5% interest per annum on your investment over and above the capital appreciation of gold.
You get a flat Rs 50 discount per gram that you apply for through online mode.
No storage hassle since it is electronically held in your demat.
Secured and backed by the Government of India. Thereby safe.
There are no management fees required to be paid for investing in SGB unlike in Gold funds
SGBs have a duration of 8 years but can also be prematurely redeemed after 5 years. Also, SGBs can be traded in the secondary market at any time through your demat account.
Iπ¬ π’π ππππππ« ππ‘ππ§ ππ‘π²π¬π’πππ₯ π π¨π₯π ?
Possessing physical gold is an emotional aspect. However if we look at it objectively it has its own challenges.
Expenses listed below takes away significant portion of your gold returns
First you pay a GST of 3% on purchasing physical gold
Getting the right market price is a challenge (for buying / selling). It differs amongst jewelers (sometime for the same purity)
Storage charges (which may range from Rs 3k to 12k in banks)
Making charges can cost up to 10-25% of the cost of gold when you make jewellery
If held less than 3yrs, you will taxed at your income slab rate
What about Gold Funds / ETFs ?
Gold Funds / ETFs are taxed as per your Income tax slab (10 - 40%). This will eat away a major part of Gold returns.
Our Conclusion: If you plan to allocate funds towards Gold for your long term portfolio, apply for SGBs december edition
