In today’s investment landscape, gold remains a trusted asset for Indian investors. Traditionally, physical gold as jewelry or coins has a popular choice for wealth preservation and growth. Digital gold is a modern alternative that’s gaining an advantage. It allows investors to buy, sell, and store gold online without any hassle. While physical gold has drawbacks like storage and handling, digital gold is popular for the ease it provides.
Digital Gold vs Physical Gold: Which is Better
Physical gold offers ownership in coins or jewellery and acts as a hedge against inflation. It offers liquidity but requires safe storage and insurance, and in some cases, high making charges. Often times, buyers may face issues like a high initial investment amount, risk of theft, and lack of physical documentation about purity or hallmarks.
Digital gold provides a modern means to invest in gold online using apps and websites. It enables investors to buy small quantities of gold without physically securing it themselves. With real-time pricing that reflects the market price of physical gold as well as easy liquidity, digital gold suits tech-savvy investors.
Here is a quick comparison between the two:
| Parameters | Physical Gold | Digital Gold |
| Accessibility | Requires buying in fixed quantities like 10g or more | Can invest fractionally with as little as Rs. 100 |
| Price Homogeneity | Differs by cities, stores, and sellers when it comes to jewellery | Prices may vary across platforms, but are linked to live market prices |
| Additional Costs | Making charges add 20-30% to the actual gold price, and 3% GST is the norm | Only 3% GST is charged on the purchase |
| Storage | Requires physical storage at secure vaults, bank lockers, or at home | Stored safely in secure vaults as per the provider on behalf of the buyer |
| Taxes on Gains from Selling Gold | Gains are taxed based on slab rates if gold is held for less than 3 years and at 20.8% if held for more than 3 years | The same tax laws apply to digital gold as physical gold |
| Ease of Buying and Selling | Can be sold through jewellers or personal connections and bought from banks, non-banking financial institutions, Indian Government mint sales offices, and jewellers | Can be bought online at any time and redeemed as physical gold or sold on the app or website |