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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