Since decades, gold has been found to be heaven for investors due to the reason that gold is steadier than any other assets during the economic crises. The yellow metal is more accepted as an investment asset. When you buy gold ETF then it means that you are buying gold in electronic form. The investment objective of Gold ETF is providing you returns that match closely the domestic cost of genuine gold. Each unit of Gold ETF that you purchase is approximately identical to the cost of 1 gram of gold. Apart from this you can easily purchase them since there are no restrictions with regards to the quantity that you buy. What that means is that you can even buy just 1 gram of Gold at a time.

Gold ETFs in India

With the debut of gold ETFs (or Gold Exchange Traded Funds), and the effortlessness with which the common investor can currently endow in gold, has caused the yellow metal much more reachable – and, consecutively, much more risky than ever. The more prevalent an investment turns, the bigger its odds of shaping into a bubble. Possibly nothing has assisted gold costs to increase but for the introduction of Gold ETFs. Prior to the introduction of Gold ETFs, the major mode of investing in gold was restricted to purchasing via actual commodity trading, physical gold or jewelry. The beginning of gold ETFs has made it readily available and easy to invest in gold.

Despite the fact that the tentative attention in gold has co-occurred with the development of gold ETF business, even then it can be said that it is not essentially induced by the ETF. The increase in the price of gold has been supported by the introduction of ETFs apart from being acting as a multiplier factor.

It is without doubt that the introduction of the gold ETFs has augmented awareness, produced the fantasy that committing in gold via ETFs is safe and secure. This has promoted several capitalists, who were once fearful of investing in gold have started to purchase and invest in gold now.

Gold investment in India via gold ETF

In order to find out which is the best gold ETF in India you will have to compare the expenditure ratios of all gold ETFs in India. This way you can find out the least expensive ones. The next factor which you have to look is which Gold ETF is being actively traded. When you go in for actively traded ETF then you can be sure about its liquidity nature as well, meaning that you can liquidate your investment very easily.

Tax implications on ETFs

The ETFs for taxation purpose are treated as debt funds and not as equity. Hence MF taxation rules are applicable. You will not be charged with any securities transaction tax when you trade on gold ETFs. The holder of such an asset needs to pay a yearly price which does not fall under any tax ambit.

While buying back, the Gold ETFs which you hold for over a year then you have to pay a long-term capital gain tax which works to around 11.33% when it is not indexed and 22.66% when it is indexed. If you hold it for a short term then the capital gain, then the short-term capital gain will be linked to your income, and you will be taxed depending on the appropriate tax slab.