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Beginner explainers, cost and tax, advanced mechanics, and buying — every guide ends in a calculator or a comparison instead of a recommendation.
Beginner
What each route is, and how it differs from the others.
A mutual-fund scheme that holds physical gold and issues units trading on the exchange like a share. You buy through a broker into a demat account, pay the market price rather than the NAV, and carry the scheme's expense ratio plus a bid-ask spread that widens in thin schemes.
A platform balance representing gold the seller says it holds for you, bought in fractions from a few rupees. It is not a security: what you own is a claim on the seller, only that platform buys it back, and SEBI cautioned the public in November 2025 that it is not offered through SEBI-regulated gold products.
An unlisted fund-of-funds that holds a gold ETF, bought and redeemed at NAV — which is what makes a plain monthly SIP possible with no demat account. The price is convenience plus a second expense layer: the fund's own ratio sits on top of the underlying ETF's.
The ETF is a SEBI-regulated scheme whose units trade publicly; digital gold is a bilateral claim on a platform with no public price. The practical differences are exit (any buyer on the exchange vs only the platform), price discovery (public vs the platform's quote) and protection (securities-market framework vs none).
Same metal, different execution: the ETF needs a demat account and trades intraday at market prices that can drift from NAV; the fund needs neither, redeems at NAV, and accepts SIPs — but charges its own expense ratio over the ETF's. Neither is better in the abstract; the trade-off is execution control against SIP convenience and one cost layer.
Possession against exposure. Jewellery, coins and bars give you the metal plus making charges, 3% GST, storage and a resale spread; financial routes (ETF, fund, EGR) give price exposure with fund expenses or spreads instead. Making charges and the buy-back haircut can wipe out years of appreciation, which is why the hub prices them before anything else.
Cost & tax
GST, making charges and the tax framework — the parts that decide what you keep.
Gold metal carries 3% GST; making charges billed separately carry 5%; a jeweller billing one composite price for ready-made jewellery taxes the whole bill at 3%. On fund and ETF units there is no GST on the units themselves — 18% applies to the AMC's charges and to brokerage instead.
The labour margin on jewellery, over the metal value — and the number that most decides whether a jewellery purchase ever breaks even, ahead of GST. Coins and bars usually carry none, which is why investment-grade buying avoids ornament margins. The jewellery calculator converts any quote into an effective price per gram.
Framework, not filing advice: the Finance (No. 2) Act 2024 removed indexation and set a uniform 12.5% long-term rate. Listed gold-ETF units use the 12-month listed test; unlisted fund units and jewellery use the 24-month test; derivatives are generally business income at slab rates. Confirm your position with a tax adviser.
Sell above cost and the gain is capital gains; how long you held decides short vs long term and therefore the rate. The return calculator shows absolute and percentage gain on a holding you own, with CAGR where the period is known — the tax leg is yours to confirm.
Treated as a transfer of gold — which means the platform's structure (sale of metal vs balance) decides the paperwork. The hub states this as framework only: confirm the treatment from the invoice and your adviser rather than assuming fund-like taxation.
Advanced
Tracking, derivatives and market structure for readers past the basics.
The gap between the scheme's return and gold's own return — caused by the expense ratio, cash drag and trading frictions. It compounds quietly, which is why two ETFs on the same metal keep different amounts of it. LetsInvest publishes no tracking figures (no feed); the AMC factsheet does.
Difference is the realised shortfall over a period; error is its volatility. For a buy-and-hold investor the difference is the number that mattered — it is the rupees that stayed with the scheme instead of you.
Exchange-traded contracts to buy or sell fixed gold quantities later, bought on margin with daily mark-to-market. Leverage, expiry and margin calls make the risk profile materially different from holding gold; most positions square off before expiry. Smaller-sized mini and micro contracts exist — check the exchange's current contract specs, not this page, for sizes.
The right, not the obligation, to buy or sell a gold contract at a set price before expiry — bought for a premium that can expire worthless. Time decay works against a held position, and exercise can leave you with a futures position rather than metal.
Electronic Gold Receipts: exchange-traded securities for standardised gold in SEBI-registered vaults, held in demat, convertible to physical metal through the prescribed process. Listed denominations run 10 mg to 1 kg in 999 and 995 purity — a young market where depth and exit price vary.
Funds redeem at NAV; ETFs trade at whatever the order book says. In a thin ETF the price you get can sit away from NAV — the spread is a real cost, and large orders in small schemes move it. Check depth before assuming you transact at the metal's price.
Buying gold
Purity, hallmarking and the physical purchase itself.
24K is 999-fine metal; 22K is 916-fine (alloyed for strength, which is why jewellery is usually 22K or below). Non-24K rates derive from the 24K rate at the hallmark fineness ratio — the jewellery calculator applies exactly that conversion.
Hallmarking certifies the tested fineness of jewellery sold in India — look for the BIS mark plus the fineness (22K916 and the like) rather than taking the seller's word. Resale can mean re-assay, which is one more friction physical gold carries.
Both are investment-grade metal without jewellery's making charges; bars usually carry the thinner premium over the metal rate, coins the wider retail network. Either way you carry GST, storage and the dealer's buy-back spread — price all three before comparing with a fund.
Jewellery is wear plus gifting plus partial value storage; investment gold (coins, bars, ETFs, funds, EGRs) is value exposure without ornament margins. Buying jewellery as an investment means the making charges and resale spread must first be earned back — usually over years.
Guide content reviewed 2026-09-20; each topic restates the sourced framework facts from the hub — see our methodology.
