How we will get more profit without buying physical. Because there is a lot of the disadvantage in Physical Gold Wherein you have to pay for the making charges.

Jwellery has an issue of safety and with the purity test. Or else, you are required to polish it over a period of time. Then for this separate expense and lastly, when this design is outdated, after 5-10 years then want to pay additionally for making charge to create a new design.

However, if we compare that to digital gold, then you won’t have to spend so much. Invest once in Gold, sell it in a few years at a higher price and earn a pure profit without any expense.

By Gold investment, you can earn 2.5% per annum interest. You can avoid GST based on your purchase of Gold, In fact, you can sell your Gold and the profit what you earn can save tax on that too. That means the entire profit will be tax-free.

Sovereign Gold Bond

How to buy this? By sitting at home, with the help of your phone And And And!. Based on the price that the RBI has issued, you can buy the gold even at a lower price. So Sovereign Gold Bond’s, from now on will state it as SGB. SGB is issued by RBI, If buy the Gold Bond from RBI based on the price of the Gold today Keep it for 8 years. Based on the Gold Priceafter 8 years, RBI will buy the Gold from us and we can earn profit.

If Gold Bond is allotted to you, then it’s a Physical Certificate presented to you as a proof of purchase. Its maturity is 8 years. If we want Premature Withdrawal we can sell it to RBI after 5 years as well. If we think after 8 years, that is not the right time to sell, for that you can extend this for another 3 years. That means you can hold it for 11 years.

Advantages of SGB

Advantages, which won’t be available for you in any other Gold Investment Firstly, this is issued by RBI, then there is no option to worry about safety Irrespective of the amount of Gold Bond you purchase, you will receive an interest of 2.5% per annum on that which will be credited to your Bank every 6 months. This is not Compound Interest instead it is a Simple Interest and we will receive at Initial Investment.

Another advantage is that, you don’t have to pay any GST on this, which otherwise you need to pay for Physical Gold or Digital Gold. There is another best benefit, that after 8, 5 or 11 years later, whenever we sell the Gold to RBI. Then the profit that you will earn that time, there will be no tax imposed on that That means the Long Term Capital Tax is exempted.

There is another benefit that you can apply for this offline by visiting a Bank or can apply at a Post Office But you can also apply it online By applying it online, you will receive a discount of INR 50/Gram. Moreover, when buying this as a form, when mention the DP ID of your DEMAT Account then the Gold Bond will appear in your DEMAT Account as the form of Holdings.

What is the benefit of DEMAT?

We can sell it before 5 years like we sell and buy our shares in the DEMAT Account.

This Gold Bond is also tradeable and you can sell this to anyone whenever you want, in a secondary share market There is a slight catch in that in the stock market, the price of anything is dependant on the demand and supply.

That means If there aren’t a lot of buyers purchase Gold Bonds in the market, then there is a possibility that based on the price at that particular time, you won’t be able to sell it at that price, and might be able to sell at a lower price. But this a really nice flexibility that you don’t have to wait for 5, 8 or 11 years.

If you want to sell it quickly, then you can trade it in the share market. There is one more point that you need to consider that RBI will buy back SGB, within a few years Maybe 5 years, 8 years, or 11 years will certainly buy it Assuming that, in the near future the prices for Gold aren’t that attractive, despite that you will have to sell the bond to RBI This is the reason that SGB should be purchased in the form of DEMAT. So that we have one more available option to sell it.

Let’s assume, that the Gold price in the near future is lucrative and wish to redeem my Gold Bond Then don’t have to wait. can sell that in the share market Another advantage, you can mortgage your Sovereign Gold Bond Certificate and apply for loan by speaking with the Bank They also have Joint Holding available, that is you can apply for this jointly with another person.

You can also file for a Nominee option in this Obviously, you need to file for a nominee in every investment And let’s say you have bought 10 Grams of SGB Then this doesn’t mean that after 5 years when you withdraw the amount, then you have to sell the entire 10 gram You can sell 4 grams, 1 gram. You can’t less than 1 gram.

In multiples of 1, you can opt for Part-Redemption And now If you are wondering How do they decide the price of SGB It is very simple, in the past 3 working days, whichever was the price of Gold, you need to add it and divide it by 3 That means, based on the average price of last 3 days. You need to buy SGB on that and while selling as well you need to calculate the price in the same manner.

We need to hold it for 8 years After that, RBI will buy it from you. In this scenario, the capital gain that will occur for you will be completely tax-free 5 years, i.e. in regards to the case of Pre-mature Withdrawal when you will sell the Bond to RBI, then The capital gain will be tax-free In fact, if you extend it to 11 years, then If you sell it to RBI, even then the capital gain will be tax-free. But If you use this in the Secondary Market, i.e. while using the DEMAT Account, you sell it then There you will have to pay for tax as per the normal gold rate.

That means If you have attained Short Term Capital Gain If you sell it in the share market before 3 years then that gain will be added in your income and you will have to pay tax according to your tax slab. But If you sell it after 3 years, then you will have to pay Long Term Capital Gain Tax which is 20% of your Capital Gain + 4% CESS with Indexation Benefit.

What is Indexation? Ee; you bought Gold at a certain price 8 years ago, For 8 years, inflation has also increased. Then to calculate your gain, the cost which is considered instead of considering the original cost, the new cost is considered. So that cost is a bit higher Based on the high cost, If you evaluate the profit, then profit calculation will be lower Based on the low calculation, you will have to pay lesser tax It is a good part, that the Indexation benefit has been provided.

Is it possible for you to buy it at anytime? No! SGB is issued 5 times a year. It has certain dates For eg; the date right now is dd/mm/yyy. You can even check the next dates on the screen. In the current 5 day window, you can apply for Sovereign Bonds You can buy this from a Commercial Bank or from a Post Office. And you can buy this from your Stock Exchange Or else which is favorite method, which is to use DEMAT Account and purchase it. Because this is a very easy process.