Gold Rate In Karnataka

What are the various forms of investment in gold in Karnataka?

There are multiple forms of investment in gold in today’s age. The details of the various forms of investment in gold are given below.

Physical form

Gold has been traditionally invested in its physical form. Such physical firm includes investment in gold jewellery, gold coins, gold bullions and bars. Among these, the investment in gold coins or gold bars and bullions provides the benefit of maximum returns to the investors as they are in the purest forms i.e., 24K gold.

Paper form

The paper form is the dynamic model of investment in gold. This allows the investor to avoid the risks associated with an investment in physical gold at the same time earn good returns on their investment without the need to redeem it to earn capital gains. The various types of investment in paper form of gold include,

Gold mutual funds

Gold mutual funds are funds that invest in gold ETFs. These funds track the movement of gold prices but are not directly affected by them. Investment in gold funds does not require the investors to open a Demat account and investment can be easily started through SIPs.

Gold ETFs

Gold ETFs invest in gold and are traded in an open market like any other ETF. The investors need a Demat account and a trading account for trading in gold ETFs. These are relatively low risk products that have the potential to provide good returns to investors.

Gold Sovereign Bonds

Sovereign gold bonds are issued by the RBI on behalf of the Central Government. These are government-backed schemes hence the risk of loss of investment is nil. The bonds provide nominal returns to the investors and have a tenure of 8 years.

Digital form 

This is the new form of investment in gold. In this case, the investor has the option to own the gold in digital form in digital locker holdings. The investment is completely digital with the option to convert it in the physical form in the nature of gold coins, gold bars and gold jewellery.

How is gold investment taxed in Karnataka?

As discussed above, gold can be invested in physical form, paper for or digital firm. However, one factor common to all the investment modes is the taxation. Investment in gold attracts taxation in the form of capital gains tax as well as wealth tax in certain cases.

The levy of capital gains tax depends on two factors the period of holding and the type of asset. When a person sells physical gold, they are taxed at the flat rate of 20%. In case of gold investment in paper form, they are taxed in line with the tax structure of physical gold. This refers to the short-term capital gains tax and the long-term capital gains tax based on the period of holding.

The tax structure of paper gold is given below. 

On the other hand, the investment in Sovereign gold bonds is tax-free if held till the maturity period of 8 years. Interest income from these bonds is changed under the head ’Income from other sources’ and taxed at applicable slab rates.

Digital gold is also taxed like paper gold, the only difference being that the short-term capital gains may not be strictly taxed. 

Gold Rate Today in Karnataka