India is the world’s second-largest consumer of gold. It also has one of the biggest gold markets. Although buying physical gold is the most common and well-liked way to invest, digital gold has recently gained popularity.
The sections below provide further information on the advantages of investing in digital gold and the reasons you should think about purchasing it for those who intend to do so.
Digital Gold
Table of Contents
A substitute for purchasing physical gold is digital gold. Gold can be bought online, and an equivalent amount is kept as actual gold in a vault that is protected. One rupee is the lowest amount that can be spent on goods. Customers have the option of selling all or a portion of their gold at any moment for the current market price. These pieces of gold are all 24K and have official certification. It guarantees purity and eliminates the possibility of deception.
Benefits of Investing in Digital Gold
There are many benefits to investing in this yellow metal’s digital form. These are listed below:
Discreet storage
The ease and security of digital gold’s storage is by far its greatest benefit. The business that sells digital gold will keep the gold that customers buy in safe vaults. The buyer also avoids locker fees and worries about loss or theft of gold because he does not hold the gold.
Use as a pledge
As security for loans, one may utilise digital or electronic gold. Since they are 24K pure and kept in secure vaults, some lenders will consider them as collateral. It assists borrowers in avoiding the inconveniences associated with collateral documentation and lowers their risk of loan denial.
Effortless exchange
The ability to quickly and inexpensively trade digital gold for physical gold, coins, and bullion anywhere, anytime is another important benefit. This flexibility enables people who want to turn their digital assets into tangible ones. If a person wants to use their actual gold, they can have it delivered right to their door.
Genuineness
Digital gold is 24K and has a purity of 99.99%. Buyers don’t need to be concerned about authenticity or purity. Purchasers receive value for their money and fraud risks are eliminated.
Same tax rates
The holding period determines the tax rate for digital gold, which is the same as actual gold. A Stone ring can be purchased and held in a locker and the duration that you hold it is what determines its tax. Digital gold capital gains are taxed at the appropriate income tax slab rates if held for less than three years.
However, there are certain disadvantages to digital gold as well, which are covered in the sections that follow.
The disadvantages of digital gold
No regulating body
The absence of regulatory bodies that set trading rules and regulations is one of the main drawbacks of virtual gold. This results in a lot of grey areas that the ecosystem’s unethical components could take advantage of.
The time limit for storage
Vaults that are safe and insured are used to keep physical gold. However, a lot of platforms offer these storage services for a set amount of time. One must remove or sell the gold after the specified time limit has passed.
Maximum allowed investment
There is a cap on how much money may be invested in virtual gold. On most platforms, an investor can currently invest up to Rs. 2 lakh. Therefore, it is not a desirable choice for investors seeking to make sizable investments.
Traditional physical assets are being increasingly replaced by digital ones. Virtual gold is a profitable investment choice despite some downsides such investment caps and a lack of a governing organisation. It provides adaptability, purity, and appropriate financial worth.
Depending on an investor’s needs, both physical gold and digital gold are excellent choices. Consumption of jewellery will always be in physical form, but for financial reasons, digital gold is preferable. If you wish to buy physical gold, you can opt for online gold purchase in Melorra.
