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Our country is very heavily influenced by customs & affection for gold & silver, especially the marketplace for gold coins in India has undergone a significant shift recently. Previously you had to go to physical locations where they had very limited options but now with Digitalization, people have unparalleled convenience & limitless choices for buying gold.
A report by the World Gold Council uncovers a staggering 120% year-over-year growth in online gold in sales in India during the first quarter of 2023. This phenomenal rise can be attributed to various factors
The COVID-19 pandemic which brought great suffering to many, it drove important changes in how people live and work. The people in our country started working from home. Shopping online was very much preferred as going out to buy something was like risking their lives. Even Parents who initially resisted screens were now allowed to have cell phones to study.
The Fintech Revolution like the safe payment gateways and digital wallets that streamlined transactions, enabling convenient purchases for online.
As digital skills and access expanded within communities, individuals grew more trusting of conducting monetary dealings electronically. This led to rising confidence in online sellers of gold coins and bars.
While the surge in online gold buying offered practical benefits, Let’s explore why gold has been at the edge of this online buying trend:
Hedge Against Inflation – Throughout history, Gold has consistently protected purchasing ability against inflation’s pressures. Owning coins keeps wealth’s value over eras.
Owning Physical Asset – Unlike unstable assets like equities, coins represent a tangible holding you can physically grasp and possess. This concrete nature provides a sense of security and control over investment.
Diversifying Investments – By including gold coins in holdings, one diversifies across areas and mitigates risks. This spread reduces reliance on volatile markets and ensures a balanced, resilient strategy.
Higher Liquidity – Coins can readily change to cash if needed. This liquidity allows access to investment and capitalizing on unexpected chances.
However, navigating the online gold market requires thoughtful consideration. Before making a purchase, it’s crucial to consider the following:
1. Reliable Purchase Of Gold Coin
Only opt for trusted and seasoned sellers who have consistently performed well and are highly rated by customers. Search for the BIS (Bureau of Indian Standards) seal of approval on sellers for extra confidence.
2. 24 karat Certified gold coins
Different purities exist for gold coins, determined in karats. Knowing the difference between 24 karat (the purest) and 22 karat (often used for jewelry) is key to making knowledgeable choices. Always prefer coins with a BIS hallmark to ensure their realness and purity.
3. Comparing Weight of Gold & Prices
Before buying, research and compare sellers’ prices online. Factor in costs like making charges, extra expenses tied to manufacturing and hallmarking to guarantee you get a good deal.
4. Goals for Investing
Get your investment goals clear prior to snapping up gold coins. Want a quick profit or a lifelong investment? What’s your budget? Matching your objectives and your buy makes smart choice-making possible, ensuring you pick the correct coins for your investment plan.
5. Safe Ways to Pay
Pick a site with safe ways to send money. It should have coded business deals and strong fraud protection. This keeps your money safe and guards you against internet dangers.
6. Storing Safely
It’s vital to store your newly bought gold coins securely. Get a dependable safe deposit box or home safe. This will shield your gold/silver from any loss or harm.
Worried About Taxes While Buying Gold Online?
Worry not! We are going to decode everything here for you. Basically, there are 4 major terms you need to take care of while buying GST on Gold & Making Charges, While selling Long Term Capital Gain & Short Term Capital Gains Taxes.
Fortunately while buying gold online, the tax implications are the same as if you would have bought offline.
i.e. – While buying gold it’s 3% GST plus 1.5% on making charges. If you are buying bars & coins, The making charges are negligible and 1.5% on making charges would not affect your investments much.
According to the Income Tax Act of India, you need to pay a 20% tax and a 4% cess on long-term capital gains (LTCG) while selling gold.
Short-term capital gains (STCG) taxes on the sale of assets other than shares/units like STCG on the sale of immovable property, gold, silver, etc. STCG covered under section 111A is charged to tax @ 15% (plus surcharge and cess as applicable).
Wait what, this means you will have to pay 2 kinds of taxes (LTCG & STCG) while selling your gold? No, You Pay Either!
Then the main question arises how to classify is it Long Term & Short-Term Capital Gains, don’t worry my friend because here’s your answer – Returns from gold held for 36 months or more are termed long-term capital gains; returns from gold that are held for less than this period are termed short-term capital gains (STCG).
For example, if you buy gold today and sell within 3 years then you would have to pay STCG versus LTCG which is attracted if you sell after 3 years, yes it is as simple as that!
Bonus Tip: Some sellers might offer you low rates on gold bars/coins by increasing the making charges with which you might see a reasonable initial amount but then you end up paying huge taxes on the final billing amount in the name of taxes.
Dip into the world of buying gold coins online! This path provides a secure and easy way to expand your investment. Platforms like Gujarat Gold Center are reliable gold manufacturers that not only provide you 999 purest gold but also provide you with the most ethical gold sourced.
If you are still here reading this blog, congratulations because you are one of the few ones who will make the most educated choices that will line up with your financial goals.
