Best Way to Buy Gold: Gold has been a long term performer. This is a reliable option for investment. It may not give sudden high returns like equity, but it is known to give stable returns in the long run. Its long-term returns have also been better than many asset classes. Not only in economic uncertainty but gold has also given high returns in the bullishness of stock markets. In such a situation, experts talk about keeping 5 to 8 percent allocation in gold in the portfolio. He also says that the best option to invest in gold is Sovereign Gold Bond (Sovereign Gold Bond Because some of the benefits available in it make it special.
Why Sovereign Gold Bond is the best option
Sovereign Gold Bonds (SGBs) can be the best option for investing in gold. In this you get 2.5 percent annual additional return, and there is no capital gains tax. On redeeming it on maturity, you get returns at the rate of the price of gold of 999 purity at that time. The returns received on completion of maturity are tax free. The tenure of these bonds is 8 years. But after holding for 5 years you can get out of it. This bond can also be used as collateral to take a loan.
The interest received on this is deposited in the investor’s bank account on half yearly basis. However, this interest is taxable under the Income Tax Act, 1961. The interest earned from gold bonds in a financial year is counted in the taxpayer’s income from other sources. Tax is levied on the basis of which slab the tax payer falls in.
Cheaper than the market price, you can buy even 1 gram
It is necessary to invest at least 1 gram of gold in Sovereign Gold Bond. Individuals are allowed to invest a maximum of 4 kg and entities like trusts are allowed to invest a maximum of 20 kg in gold bonds in one financial institution. At the same time, the price of gold bond is less than the prevailing price of gold in the market. If you apply and pay online, investors get a discount of Rs 50 per gram i.e. Rs 500 per 10 grams.
Gold: History of giving high returns in the long term
According to a latest report by brokerage house Motilal Oswal, gold has high returns in the long term (Gold Return) There is a history of giving. From 2010 to 2024 i.e. during the last 15 years, it has given returns at 10 percent CAGR. During this period, gold increased from around Rs 17000 to Rs 71000 per 10 grams. That means there has been an increase of about Rs 54000 per 10 grams of gold.
Price can go up to Rs 75000
Brokerage house Motilal Oswal Financial Services Limited has kept the target price for gold at Rs 75,000 per 10 grams. Anuj Gupta, Head – Commodity and Currency, HDFC Securities, says that considering the current times, it would be wise to give 5 to 8 percent allocation to gold in your portfolio. He has also set a target of Rs 75,000 in gold by the end of 2024.