Many people are fond of gold, especially women, who like jewelry not only as an investment but also for its aesthetic value.
In 2004, 10 grams of 24-carat gold was Rs. 4,110. By 2024, it had reached Rs. 75,000; experts estimate it may soon reach Rs. 1 lakh.
The demand for gold has increased, making it a stable and secure investment. When bought in jewelry, the chance of loss is minimal.
However, making charges usually range from 6-14 percent, wastage charges are 5-10 percent, and with the added GST of 3 percent, the extra cost amounts to approximately 20 percent.
Even if gold is purchased as biscuits or coins instead of jewelry, 3% GST must be paid. Therefore, investing in sovereign gold bonds is recommended, as they offer a more cost-effective way to invest in gold. As the gold rate increases, the value of your investment will also rise.
The government controls gold investments through the Sovereign Gold Bond Scheme, a favorable alternative to physical gold.
The scheme issues bonds instead of physical gold, with offerings available four times in a financial year.
Investments can be made every three months, ranging from one gram to four kg, and have a maturity period of eight years.
Holding the bonds for the entire 8-year term can provide tax benefits, as no taxes need to be paid.
Additionally, a 2.5 percent interest per annum is directly credited to your bank account until the maturity of the invested amount, making it a financially savvy choice.
If the need arises before maturity, the bonds can be sold in the secondary market through a demat account. However, selling before maturity will incur taxes.
Series 1 of the Sovereign Gold Bond Scheme is anticipated to be announced soon in the current financial year.
Being informed about this from the outset will enable you to invest in the bonds easily once they are released.