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Seven ways to hold gold, across 14 dimensions — regulation, minimum ticket, demat, SIP, GST, storage, spreads, physical delivery, tax framework and the risk that actually bites.
Pick what matters to you and the table keeps only the options that fit. Nothing here is ranked.
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Showing 3 of 7 options.
| Compared on | Digital goldFractional gold bought from a platform, stored by the seller. | Physical goldJewellery, coins and bars — metal you hold. | Electronic Gold Receipt (EGR)Exchange-traded receipt for gold sitting in a SEBI-registered vault. |
|---|---|---|---|
| Investment type | Platform balance representing gold | Jewellery, coins, bars | Exchange-traded vault receipt |
| Do you own the metal? | Not in hand; a claim on the seller | Yes, in your possession | Yes, economically — convertible to metal |
| Regulation / framework1 | Not RBI/SEBI-regulated as a security | No SEBI product framework; BIS hallmarking | SEBI Gold Exchange framework; registered vault managers |
| Minimum investment | As low as a few rupees on some platforms | 1 g coin upward; jewellery by weight | 10 mg at the smallest listed denomination |
| Liquidity | Only back to the same platform | Sell to a dealer at their buying rate | Exchange-traded; depth varies by contract |
| Demat account needed | No | No | Yes |
| SIP / recurring buying | Yes on platforms that offer it | No | No |
| GST2 | Depends on the platform's structure | 3% on metal; 5% on separately billed making charges | None on the receipt; GST on brokerage and charges |
| Storage | Platform stores it; charges vary | Your locker and insurance | SEBI-registered vault manager |
| Buy / sell spread | Platform's own buy vs sell price | Wide — dealer buy-back sits below retail | Exchange bid-ask |
| Physical delivery | Some platforms, in larger sizes | It is the metal | Yes, through the prescribed conversion process |
| Main use case | Very small, frequent purchases | Possession, gifting and jewellery | Exchange price discovery with the option to take delivery |
| Key risk to weigh3 | Seller/custody risk; no securities-market protection | Making charges and resale spread can outweigh gains | A young market — depth and exit price vary |
| Tax framework4 | Treated as a transfer of gold — confirm the treatment | Jewellery is a capital asset; long-term after 24 months, 12.5% | A security — the applicable holding-period test applies; confirm |
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Framework facts, not advice, and not a ranking. Costs and rules change — confirm the current position with the provider before acting.
FAQs
Not as a securities product. SEBI issued a public caution in November 2025 stating that digital gold is not offered through SEBI-regulated gold products, and neither RBI nor SEBI regulates it under a dedicated framework. As of September 2026, the government is reported to be considering RBI/SEBI oversight with a 1:1 physical-backing requirement, but no official framework has been notified. Physical gold, gold ETFs, gold funds and EGRs each have their own, different framework.
An EGR is an exchange-traded security that represents a defined quantity of standardised gold held with a SEBI-registered vault manager. It sits in a demat account like a share, trades on the exchange with public price discovery, and can be converted to physical gold through the prescribed process. Exchange-listed denominations run from 10 mg to 1 kg in 999 and 995 purity.
Both give gold exposure without metal in hand. A gold ETF is a listed scheme whose units you buy on the exchange in a demat account; its price can drift from NAV when the scheme is thinly traded. A gold mutual fund is an unlisted fund of fund that you buy and redeem at NAV, which is what makes a monthly SIP straightforward — but it carries its own expense ratio on top of the underlying ETF's. Neither is better in the abstract; the trade-off is demat-plus-exchange execution against SIP convenience and a second layer of cost.
This is framework, not filing advice. The Finance (No. 2) Act 2024 removed indexation and set a uniform 12.5% long-term capital gains rate. The default long-term holding test is 24 months, and listed securities use a 12-month test — so listed gold ETFs are long-term after 12 months while unlisted gold fund units use 24 months. Jewellery is a capital asset, not a personal effect, so it is taxed on the same capital-gains basis. Exchange-traded derivatives are generally treated as business income at slab rates. Confirm your position with a tax adviser.
There is no single answer, and we do not rank gold products. Most gold instruments track the same metal price, so returns differ mainly by the costs you pay to hold them: expense ratios, making charges, storage, spreads and taxes. Use the comparison to filter by what you actually need and the calculators to price the costs, then decide.
Framework facts reviewed 2026-09-20. Every cell describes a rule or a cost structure, not a recommendation, and none of it is live market data — LetsInvest has no gold price or NAV feed. Confirm the current position with the provider or your tax adviser before acting.