Which is better — physical gold, SGB or Gold ETF?

SGB is best for investors with 8-year horizon: 2.5% annual interest plus gold price appreciation plus capital gains completely exempt at maturity. Physical gold has making charges 5-25% and 3% GST reducing returns. Gold ETF has 0.5-1% expense ratio and is most liquid but taxed as LTCG after 24 months. For long-term investors, SGB wins clearly.

What are making charges on gold jewellery?

Making charges on gold jewellery range from 5% to 25% of gold value depending on design complexity. Simple jewellery 5-8%. Handcrafted or designer pieces 15-25%. Making charges are paid upfront but not recovered when selling — jewellers deduct them. This reduces the effective return on gold jewellery compared to gold coins or bars.

How is capital gains on gold taxed in India?

Gold held less than 24 months: STCG taxed at income slab rate. Gold held 24+ months: LTCG at 12.5% without indexation (Budget 2024 change). Exception: SGBs held to maturity (8 years) are completely exempt from capital gains tax — the most tax-efficient gold investment.

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Gold Investment Calculator India — Physical Gold vs SGB vs Gold ETF

Compare returns, costs and tax impact of all three gold investment options. Find which suits your investment horizon.

Bottom Line: SGB gives gold price appreciation + 2.5% interest + zero capital gains tax at maturity (8 years) = best for long-term. Physical gold has making charges (5–25%) + 3% GST. Gold ETF has 0.5–1% expense ratio but is most liquid. For 8-year horizon, SGB clearly wins.

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Gold Investment Calculator

Investment Details

Investment Amount

₹

Investment Period: 5 years

1 yr5 yr8 yr (SGB)15 yr

Expected Gold Price Growth: 9% p.a.

4%9% (avg)16%

Physical Gold Options

Making Charges: 10%

0% (coins)10%25% (designer)

Your Tax Slab (for capital gains)

Income Tax Slab

📊 Physical Gold vs SGB vs Gold ETF — Quick Reference

Feature	Physical Gold	SGB	Gold ETF
Entry Cost	Making 5-25% + GST 3%	No charges	0.5-1% expense ratio/yr
Interest	None	2.5% p.a. (taxable)	None
Storage Risk	High	None (RBI bonds)	None (Demat)
Liquidity	Medium	Low (5-yr exit)	High (stock exchange)
LTCG Tax	12.5% (24+ months)	Exempt at 8-yr maturity	12.5% (24+ months)
Best for	Emotional / gifting	8-year investors	Traders / flexibility

📖 How to Use This Calculator

1
Enter Investment AmountEnter total amount you want to invest in gold. The calculator divides it across all three options at the same amount for fair comparison.
2
Set Investment PeriodSet how many years you plan to hold. Note: SGB has 8-year maturity — at exactly 8 years, capital gains are completely exempt making it most attractive.
3
Set Gold Price Growth RateHistorical gold CAGR in India: ~8–10% over last 10 years. Use 9% for moderate estimate, 12% for optimistic.
4
Set Making ChargesGold coins/bars: 0–2%. Standard jewellery: 8–12%. Designer jewellery: 15–25%. Making charges are lost on resale — they reduce effective returns significantly.

✅ Why Use This Calculator

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3-Way Comparison

Physical gold, SGB and Gold ETF all compared at the same investment amount.

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True Cost Included

Making charges, GST and expense ratio are factored in for accurate net returns.

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SGB Interest

Includes 2.5% annual SGB interest income in the total return calculation.

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Tax Impact

Shows capital gains tax for each option — and SGB maturity exemption at 8 years.

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Net Value

Final net value after all costs and taxes — apples-to-apples comparison.

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100% Private

No data stored or sent. All calculations in your browser.

❓ Frequently Asked Questions — Gold Investment India

Which is the best gold investment in India — physical, SGB or ETF?+

SGB is best for investors with 8-year horizon: 2.5% annual interest (additional return), gold price appreciation, and completely capital gains tax-free at maturity. Physical gold best for gifting/jewellery/heirloom purposes but making charges (5-25%) erode returns. Gold ETF best for liquidity and shorter investment periods.

What are making charges on gold and how do they impact returns?+

Making charges on gold: Coins/bars: 0-2%. Simple jewellery: 5-8%. Machine-made: 8-12%. Handcrafted/designer: 15-25%. Making charges are not recovered when selling — jeweller buys back at gold price only (without making charges). On ₹1 lakh gold with 10% making: you pay ₹1.1 lakh but the gold is worth ₹1 lakh for resale purposes — 10% instant loss.

How does SGB give better returns than physical gold?+

SGB advantages over physical gold: (1) 2.5% annual interest in addition to gold price gains. (2) Zero capital gains tax if held to 8-year maturity. (3) No making charges, GST or storage cost. (4) Government of India guarantee. Over 8 years, SGB can give 30-40% higher net returns than physical gold on same investment.

Can I sell SGB before 8 years?+

Premature exit from SGB: After 5 years — exit possible on coupon payment dates. You can also sell on the stock exchange at any time (listed SGBs) but liquidity is limited. Premature exit: capital gains taxable. At 8-year maturity: capital gains completely exempt. Most financial advisors recommend holding SGB to full maturity.

What is the capital gains tax on gold in India?+

Gold held less than 24 months: STCG taxed at income slab rate. Gold held 24+ months: LTCG at 12.5% without indexation (Budget 2024). Exception: Sovereign Gold Bonds (SGB) held to maturity (8 years) — completely exempt from capital gains tax. Gold ETF: same LTCG at 12.5% after 24 months.

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