COMPARISON OF PHYSICAL GOLD, GOLD ETF AND SOVEREIGN GOLD BONDS
Points |
Physical Gold |
Gold ETF |
Sovereign Gold Bonds |
| Returns | Lower than actual return on gold |
Lower than actual return on gold |
Higher than actual return on gold |
| Safety | Risk on handling physical gold |
High | High |
| Purity of Gold | Purity of Gold always remains a question | High as it is in Electronic Form |
High as it is in Electronic Form |
| Wealth Tax | Wealth tax applicable at 1% on the total valuation of the assets every year |
Not Applicable | Not Applicable |
| Capital Gain | Long term capital gain tax applicable after 3 years |
Long term capital gain tax applicable after 3 years |
Long term capital gain tax applicable after 3 years (No Capital Gain Tax if held till maturity) |
| Collateral against Loan |
Yes | No | Yes |
| Tradability / Exit Route |
Conditional | Tradeable on Exchange |
Tradeable on Exchange Redemption 5th year onwards with Government of India |
| Storage Cost | High | Very Low | Very Low |
