Akshaya Tritiya 2024: What To Consider Before Buying Digital Or Physical Gold?

Buying gold during Akshaya Tritiya, also known as ‘Akha Teej’, is considered auspicious in India. It is believed that any new beginning on Akshaya Tritiya, which means imperishable or never-ending, in the Sanskrit language, brings good luck, good fortune, and prosperity. Many people in India buy land, start a new business, or invest in properties and financial instruments, including gold, during this festival to usher in success in whatever they want to do in their lives. Also Read: 5 ‘Samajik Suraksha’ Pension Schemes To Explore For Retirement Gold is considered a safe haven around the world because of its hedging abilities against inflation and uncertain economic situations, as its prices do not abruptly vary like other assets. Indians also gift gold during marriages and festivals like Dhanteras, Durga Puja, etc. Options For Gold Investments Nowadays, there are various gold investment products besides physical gold, from digital gold and gold mutual funds to gold exchange-traded funds (ETFs) and sovereign gold bonds (SGBs). So, on Akshaya Tritiya today, if you want to buy this precious metal solely for investment and not for personal consumption, like jewellery, digital gold could be an option. Of course, gold jewellery is the most widely used mode of investment because it serves two purposes: gifting and hedging against financial emergencies. Despite these positives, digital gold might still have an edge over physical gold when investing. However, experts stress one should buy jewellery only for personal use and not for investment. So, if the purpose is an investment, one could explore digital gold. Major gold trading platforms in India included MMTC-PAMP, Augmont Gold, and SafeGold. Augmont has recently tied up with gold jewellery brand Caratlane to enable customers to convert their Augmont Digi (Digital) Gold into physical gold, allowing them to redeem their Augmont digital gold for Caratlane jewellery, according to its press release. Moreover, unlike physical gold, people can invest in digital gold with as little as Re 1, offered by Augmont. On the other hand, SafeGold’s minimum investment in digital gold is as low as Rs 100.

Converting Digital Gold Into Physical Gold

Buying digital gold has many advantages. For instance, there is no risk of theft or loss. Additionally, it does not require storage space, so there is no task for managing or handling. Keeping gold jewellery at home could be risky, and bank lockers could charge a hefty rent. However, there are no such hassles in digital gold. Also, you can convert it into physical gold, like gold coins or jewellery, or redeem it for cash anytime, offering investors more choices. You can buy digital gold by visiting one of the gold trading platforms online and investing as per your financial ability. Also Read: How Does Taxable Income Be Calculated For Seniors Seeking Exemption From ITR Filing? In addition, digital gold has no making charges as in jewellery, which could range from 6 to 14 per cent or more depending on the carat and weight. However, in the case of digital gold, a customer is charged a 3 per cent Goods and Service Tax (GST) at the time of purchase. Says Sachin Kothari, director of Augmont Gold for All, says, “Investing in digital gold guarantees that your funds are allocated to 24-carat gold, the most pure kind of yellow metal. You, therefore, receive the value for your money. Anytime you want, you can turn your digital gold into real gold. To convert digital gold into physical gold, such as coins, bars, etc., you must have at least one gram of gold in your account. If you would want this physical gold delivered to your door, you can pay an extra fee.” Regarding taxation, Kothari says, “The tax rate on digital gold is the same as physical gold. You must pay 3 per cent GST when you buy digital gold.” Finally, given its positives and negatives, you must explore all the pros and cons, including the domestic and global trends and individual requirements, before investing in digital gold. Also, note that digital gold is not regulated by the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI).