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Safest: Zero risk of handling physical gold
Earn Interest: 2.75% assured interest per annum on the initial investment
Tax benefits: No TDS applicable on interest Indexation benefit if bond is transferred before maturity Capital gain tax exempt on redemption
Assurance of purity: RBI will announce the price before the issue date which will be fixed on the previous week’s simple average of closing price of gold of 999 purity published by IBJA.
Sovereign guarantee: Both on redemption amount and on the interest.
Easy exit option: The tenure of the bond is for 8 years with an option to redeem from 5th year onward on the date on which interest is payable.
Ease of borrowing loan:Can be used as collateral Loans
Ease of borrowing loan:Tranche 1 trading commenced from June 13, 2016 onward.
|Points||Physical Gold||Gold ETF||Sovereign Gold Bonds|
|Returns||Lower than the actual return on gold||Lower than the actual on Gold||Higher than actual return on gold|
|Safety||Risk on Handling physical gold||High||High|
|Purity of Gold||Purity of gold always remains a question||High as it is Electronic Form||High as it is Electronic Form|
|Wealth tax||Wealth tax applicable at 1% on the valuation of the assets every year||Not applicable||Not Applicable|
|Capital Gain||Long term capital gain tax applicable after 3 years||Long term capital gain tax applicable after 3 years||Long term capital gain tax applicable after 3 years (No capital gain tax if held till maturity*)|
|Collateral against loan||Yes||No||Yes|
|Tradability / Exit route||Conditional||Trade on Exchange||Tradable on Exchange redemption – 5th year onwards with Gol|
|Storage Cost||High||Very Low||Very Low|