Active Stocks
Thu Mar 28 2024 13:49:19
  1. Tata Steel share price
  2. 155.60 1.80%
  1. HDFC Bank share price
  2. 1,454.40 0.95%
  1. Power Grid Corporation Of India share price
  2. 277.00 2.20%
  1. ITC share price
  2. 430.30 0.54%
  1. State Bank Of India share price
  2. 754.80 2.83%
Business News/ Money / Personal Finance/  Want to invest in gold? Zerodha's Nithin Kamath has a suggestion
BackBack

Want to invest in gold? Zerodha's Nithin Kamath has a suggestion

Zerodha founder & CEO Nithin Kamath said that by choosing Sovereign Gold Bond, gold ETF and gold mutual funds ahead of digital gold an investor will be able to save an additional 5 per cent difference on buying and selling of gold

Zerodha founder & CEO Nithin Kamath said that if an investor is mulling to invest in gold, Sovereign gold bonds followed by Gold ETF/MFs are the best option.Premium
Zerodha founder & CEO Nithin Kamath said that if an investor is mulling to invest in gold, Sovereign gold bonds followed by Gold ETF/MFs are the best option.

In the wake of rising gold prices, investors are mulling to invest in the precious metal. As gold investment is not restricted to physical gold only, people invest in electronic and paper gold as well. So, for those gold investors, who want to invest in other than physical gold option, Zerodha founder and CEO Nithin Kamath has an old suggestion. In an old tweet, Zerodha founder said that Sovereign Gold Bond followed by gold ETF and gold mutual funds should be preferred to digital gold. He said that by choosing Sovereign Gold Bond, gold ETF and gold mutual funds ahead of digital gold an investor will be able to save an additional 5 per cent difference on buying and selling of gold.

Explaining in detail as to why one should invest in SGB, gold ETF or gold mutual funds, Nithin Kamath tweeted, "Seems like everyone is selling digital gold. On digital gold, you lose 3% as GST, up to 2% in commissions, & a spread >5% (buy-sell difference). If you are looking at gold as an investment option, Sovereign gold bonds followed by Gold ETF/MFs are the best option."

Digital gold vs Sovereign Gold Bond vs gold ETF vs gold mutual funds

On why Sovereign Gold Bonds are best among all possible gold investment options, Archit Gupta, Founder & CEO at Clear said, "Investors receive interest of 2.5% per annum from SGBs, which is added to the investor's taxable income and taxed according to the applicable income tax slab. SGBs have a maturity period of eight years. The capital gains one makes from SGBs, if held till maturity, are tax-free. However, investors can prematurely redeem SGBs after five years. If you redeem SGBs between five to eight years, the gains are considered long-term capital gains. It is taxed at 20.8% (including cess) with the indexation benefit."

"Investors can buy and sell SGBs over the stock exchange. If SGBs are sold before three years, the capital gains are added to the investor's income and taxed based on the applicable income tax slab. Moreover, the capital gains earned by investors on selling SGBs over the stock exchange after three years are long-term and taxed at 20% with indexation benefit," said Archit Gupta of Clear.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 28 May 2022, 09:43 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App