Gold can still be used as money even though it is no longer in use as money. In actuality, gold has been used as a store of wealth for almost three thousand years. Much longer than any other form of cash. Gold is presented to sacred temples on practically all important occasions in India since it is thought to be God’s money. India is becoming the world’s biggest gold importer as a result. Indians have discovered a new way to invest in the yellow metal known as Digital Gold despite the fact that the world is now experiencing a pandemic. Being able to buy gold online has proven to be the ideal answer for many investors, as individuals are reluctant to visit jewellery stores and gold dealers.
Digital Gold: What is it?
The golden metal can be purchased and invested in virtually through the use of digital gold without needing to hold any actual gold. Online shopping is an option. Additionally, there is a rupee buy or sell minimum.
Key characteristics of digital gold
Safety Assured
As opposed to actual gold, which must be physically purchased, there is no risk of theft or high storage costs.
Sell at any moment from your house
You can sell whenever you want, without having to leave your house, and get paid right away.
Change to actual gold
Anytime, on our website or in our store, you may turn your digital gold into real gold in the form of jewellery.
Purchase for as little as $100
In order to purchase digital gold, a little sum of money is needed. Based on your budget, you can purchase.
Pros of Purchasing Digital Gold
- Any app on the internet allows the purchase of digital gold. You can purchase Digital Gold at the going rate for gold and sell it anytime the value increases.
- The maximum investment varies depending on the application, however you can choose to make one for as little as $100. Purchasing digital gold is thus incredibly simple.
- Without purchasing physical gold, you can benefit from the gains of digital gold. It is possible to turn the digital gold into actual gold. You can get the actual gold delivered right to your door. Physical gold can be created from digital gold extremely quickly.
- Digital gold is quite liquid; you can turn it into cash with only a few clicks, whenever you choose.
- Unlike the price of actual gold, the price of digital gold is consistent across all states in the nation.
- You don’t have to worry about storage at all if you use digital gold. Your gold is kept by the vendors in a safe place.
- The smartphone application makes it incredibly simple to purchase digital gold.
Cons of Purchasing Digital Gold
- When purchasing gold, consumers must pay a 3 percent government tax. This is so that you may understand that when you own digital gold, you also own physical gold that is securely kept on your behalf by the seller.
- Approximately 2–3 percent of the price of gold must be paid in additional spread costs, which include handling fees, transaction fees, and storage fees. These two fees only apply to purchases of gold; they are not applicable to sales.
- The percentage you pay also depends on the vendor you select. Regardless of the type of investment you make, transaction fees apply.
- The majority of businesses also require their investors to sign time-limited agreements or bonds.
- The investor is required to sell digital gold at least or convert it into physical gold after the designated time period. In the event that this is the case, the company has the right to deactivate the account, which would damage the gold investment that is stored under the same.
Taxes must be paid under two categories:
Gain in the Short Run
It will be regarded as a short-term capital gain, for instance, if online gold is sold before three years have passed. It is subject to taxation in accordance with the applicable income tax bracket.
Gain in the long run
It will be regarded as a long-term financial gain if digital gold is sold after three years. 20 percent tax and 4 percent CESS with indexation are due on that. By protecting your profit from high tax rates, indexation protects the investment amount’s profit. This indicates that if you bought gold earlier, when the price was lower, your income would have been very high. Consequently, you must make a significant financial contribution. However, indexation claims that at the time, the inflation rate was likewise lower, and that it is currently also high. As a result, it avoids paying substantial taxes.
All investments are subject to taxation in India, and whatever instrument you choose to invest in will incur additional fees. Service tax, brokerage fees, and other additional costs are among them. A wise investment is one that generates significant returns while outpacing all additional costs. Such an investment is gold. Invest in the asset class whose benefits outweigh its drawbacks. Digital gold is a fantastic option because its drawbacks are greatly outweighed by its benefits.