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The government has also relaxed mandatory gold hallmarking guidelines for some industry players

After rising over Rs 56,000/10 grams in August 2020, the price of gold came down to just under Rs 45,000 in March 2021 and has again started rising. Nowadays, there are several options to invest in gold through different channels such as gold bonds, gold exchange traded funds and digital modes, apart from holding physical quantities of the yellow metal.

But there is a cost associated with each mode.

Here is a small guide for you on the initial charges for investing in gold bonds, exchange traded funds (ETF) and digital gold.

To begin with, there is 3% GST is levied over any amount of physical gold purchase.

Digital Gold

One can buy digital gold through PhonePay, Paytm or Stock Holding Corporation of India. Otherwise, one can buy it through SafeGold platform.

If you buy from PhonePe or Paytm, you can keep it for a maximum period of five years. After that you have to convert it into coins or bars or sell it.

If you are on SafeGold platform, you can hold it for two years free of cost. After that for every 2 gm of gold you will be charged 0.05% of the total gold value per month.

Gold ETF

You can invest as per your capacity and there is no upper ceiling. But one has to spend an additional 0.003% of the transaction charge over the total turnover value. Besides, 18% transaction charge is also levied on the customer.

Besides, SEBI charges Rs 10 stamp duty per Rs 1 crore transactions. However, in ETF one can get input tax credit.

Gold bond

One can buy it from any commercial bank, Stock Holding Corporation of India and from post offices. Here you can hold it for a period of 8 years.

These bonds are launched by Reserve Bank of India. The RBI launched the 12th tranche of SGB priced at Rs 4,662/gm on March 1, and it will give you fixed return at a rate of 2.5% pa.

Gold bars, coins, ornaments: You can invest in gold in the form of ornaments, bars or coins. You can invest as much as you wish but have to pay 3% GST on the value.

But if you want to sell ornaments, there is a straight discount of more than 10% on the purity of gold, making and design charges that are built into the cost of ornaments.

“Gold is the one of the best medium of investment. Gold ETFs and bonds are two attractive ways of investing. In some states investing in gold ornaments is also a part of social customs. However, investing in gold ornaments also entails a risk of an erosion of value if you want to sell it,” said Nilanjan Dey, Director, Wishlist Capital Services.