Gold Investment Calculator

Physical Gold: High making charges (8-20%), GST 3%, but culturally valued for weddings/gifts. Digital Gold: 3% GST, storage fees 0.5-1%/year, convenient but exit issues. Sovereign Gold Bonds (SGBs): BEST option—2.5% annual interest, zero GST/making charges, exempt from capital gains if held to maturity (8 years), backed by RBI. Recommendation: 70% SGBs, 20% physical (jewelry), 10% digital gold or gold ETFs.

Physical/Digital Gold: (1) Holding {"<"}3 years = Short-term capital gains taxed at your income tax slab, (2) Holding {>}3 years = Long-term capital gains at 20% with indexation benefit. SGBs: (1) Interest: Taxable as per slab, (2) Capital gains if sold before maturity: 20% LTCG with indexation, (3) Capital gains if held to maturity (8 years): 100% TAX-FREE. Example: ₹1L invested in SGB, matured at ₹2L → ₹1L gain is completely tax-free.

Making charges: Fee jewelers charge to convert gold into jewelry (8-25% of gold value). Example: 10g gold = ₹60k, making charge 15% = ₹9k extra. Minimize by: (1) Buy during Akshaya Tritiya/Dhanteras offers (flat ₹100/g making charge), (2) Choose simple designs (lower labor), (3) Negotiate for bulk purchases, (4) Buy gold coins (making charge 5-8%, not 15-20%). Alternatively, invest in SGBs (zero making charges).

YES. 3% GST on gold purchases (physical or digital). Example: Buy 10g gold at ₹6,000/g = ₹60,000 + 3% GST (₹1,800) + making charges. Total: ~₹70k for ₹60k worth of gold. SGBs: NO GST, NO making charges. This is why SGBs are tax-efficient—you pay face value (₹6,000/g) with zero extra costs.

PARTIALLY. Historical data (2000-2023): Gold returned 10-11% CAGR in India, closely matching inflation (~6%). However, equity (Nifty 50) returned 13-14% CAGR, beating both gold and inflation. Use gold for: (1) Portfolio diversification (10-15% allocation), (2) Cultural needs (weddings, festivals), (3) Geopolitical uncertainty hedge. NOT a high-growth asset—equity outperforms over 10+ years.

Financial advisors recommend 10-15% of total investment portfolio in gold. Example: ₹10L portfolio → ₹1-1.5L in gold. Breakdown: ₹1L in SGBs (for returns), ₹30-50k in physical gold (for emergencies/cultural needs). NEVER go beyond 20%—gold doesn&apos;t generate income (unlike stocks/bonds), only appreciates. Rebalance annually if gold allocation drifts above 15%.

YES. Gold loans available from banks and NBFCs at 7-12% interest. Loan amount: 70-75% of gold&apos;s current market value (LTV). Example: 50g gold worth ₹3L → Get loan ~₹2.1L. Pros: Quick processing, lower interest than personal loans. Cons: Risk of losing gold if you default, fluctuating gold prices affect LTV. Use for short-term emergencies (3-12 months), NOT long-term needs.

24K = 99.9% pure gold, soft and not ideal for jewelry (bends easily). Used for coins, bars, investment. 22K = 91.6% pure gold + 8.4% alloy (copper, silver) for durability, used for jewelry. Price difference: 22K costs ~8% less than 24K. For investment: Buy 24K (999 purity) gold coins or SGBs. For jewelry: 22K is the standard. Verify purity with BIS Hallmark certification.

Festival discounts: Akshaya Tritiya (April-May), Dhanteras (Oct-Nov), Diwali. Jewelers offer reduced making charges (sometimes flat ₹100/g vs normal 15-20%). Market timing: Historically, gold prices dip in Jan-March and July-August (wedding off-season), rally during Sept-Dec (wedding season). However, timing is unpredictable—DCA monthly via SGBs is better than trying to time the market.