Last updated: October 2026 Β· 3 min read
Indians love gold for weddings, festivals and as a safety net. As an investment, gold often rises when stock markets or the rupee are weak. But how you buy gold changes your costs, safety and taxes.
Comparing the options
| Option | Pros | Cons |
|---|---|---|
| Jewellery | Wearable, cultural value | Making charges 8-25%, purity risk, GST 3% |
| Coins and bars | Physical, hallmarked purity | Storage and theft risk, making charges, 3% GST |
| Gold ETFs | Traded on NSE/BSE, low cost, pure | Needs demat account; expense ratio |
| Gold mutual funds (fund of funds) | SIP possible, no demat needed | Slightly higher costs |
| Digital gold (apps) | Buy from βΉ1, stored by vault provider | Not regulated by SEBI or RBI; spread and storage charges |
| Sovereign Gold Bonds (existing) | 2.5% interest, tax-free at maturity | No new issues since 2024; buy existing ones on exchanges |
Hallmarking rules
BIS hallmarking is mandatory for gold jewellery and artefacts sold in India. Look for the BIS logo, purity grade (such as 22K916) and a 6-digit HUID code, which you can verify on the BIS Care app.
How much gold should you hold?
Many planners suggest keeping gold at about 5-15% of your investment portfolio for diversification, not as your main investment.
Tax on gold
- Physical gold, digital gold and gold mutual funds: long-term (held over 24 months) gains taxed at 12.5%; short-term at slab rate.
- Gold ETFs: long-term if held over 12 months, taxed at 12.5%; otherwise slab rate.
- SGBs: interest taxable; capital gains tax-free if held to maturity by an individual.
Tips before buying
- Buy only hallmarked jewellery and ask for the HUID and bill.
- Compare making charges across jewellers.
- For investment, prefer ETFs or gold funds over jewellery.
- Be cautious with digital gold platforms; understand who stores the gold and the exit costs.
Frequently asked questions
Is gold a good investment in 2026?
Gold can protect against inflation and market falls, but prices can also fall. Treat it as a portfolio diversifier, not a guaranteed return.
What is the difference between 22K and 24K gold?
24K is about 99.9% pure and used for coins and bars; 22K (91.6%) is common in jewellery because it is stronger.
Can I still buy Sovereign Gold Bonds?
The government has not issued new tranches since 2024, but existing SGBs trade on stock exchanges.
Keep exploring
- Facts about the Indian rupee
- SIP explained
- Capital gains tax
- More Savings & Investment articles on Tiwaripedia
This article is for general information, not financial, tax or legal advice. Rates, limits and rules change; always confirm on the official website or with a qualified advisor before you act. Spotted something that needs updating? Let us know.
