Introduction
This article index
✅ Cultural opening + Dhanteras context
✅ All investment options with pros / cons
✅ GST on buying gold
✅ Income-tax rules on selling + inherited gold
✅ CBDT Circular 1916 family-holding limits
✅ Full Sovereign Gold Bond (SGB) deep-dive
✅ Latest 2025 availability + secondary-market update (with sources)
✅ Portfolio-allocation method + Taresh Gold Plan
✅ closing action
1️⃣ Why Gold Still Matters — The Indian Context
Every October, when clients visit my Gurugram office and ask, “Taresh, should I buy gold before Dhanteras?” — I smile.
Because gold is more than a metal. It’s trust + tradition + strategy.
Gold has protected Indian families through wars, currency devaluations, and market crashes. It doesn’t earn interest, but it protects purchasing power — a hedge against inflation, a shield when markets panic.
Gold = stability. Equity = growth. Debt = income.
The harmony of these three gives every investor true Richness.
2️⃣ All Ways to Invest in Gold — Options, Pros & Cons
Option What It Is Pros Cons Best For
Physical Gold (Jewellery/Coins/Bars) Tangible possession Emotional value, no counterparty risk Making charges, storage, theft risk, no yield Tradition-oriented buyers
Digital Gold Small grams held online Easy, fractional Platform risk, fees, regulatory uncertainty First-time savers
Gold ETFs Exchange-traded funds backed by physical gold Liquid, transparent Tracking error, needs demat Market-savvy investors
Gold Mutual Funds / FoFs MFs investing in ETFs SIP friendly, no demat needed Expense ratio, fund risk Hands-off investors
Sovereign Gold Bonds (SGBs) Govt bonds linked to gold price + coupon Interest + tax-free capital gains at maturity 8-yr lock-in, liquidity only via markets Long-term goals
Gold Futures / Derivatives Commodity contracts Leverage for hedgers High risk, short-term Traders only
3️⃣ GST on Buying Gold (2025 Rules)
Whenever you buy gold — jewellery, coins, bars, or digital gold — you pay GST.
• 3 % GST on the value of gold.
• 5 % GST on making charges (if separately billed).
Example: Buy ₹50,000 of gold + ₹5,000 making charge.
→ ₹1,500 (3 %) + ₹250 (5 %) = ₹1,750 GST total.
✅ Always ask for an invoice showing both components separately.
4️⃣ Income Tax on Selling Gold — Capital Gains
Short-Term Capital Gain (STCG)
Sell within 3 years → profit added to your income and taxed per slab.
(E.g., ₹2 L → ₹2.5 L in a year = ₹50 k taxed at your rate.)
Long-Term Capital Gain (LTCG)
Sell after 3 years → tax at 12.5 % (flat, no indexation) under the new 2024 framework. (Previously 20 % with indexation.)
👉 Hold > 24 months (physical) or > 12 months (ETFs / funds) for LTCG eligibility.
5️⃣ Tax on Inherited Gold
Receiving gold as inheritance or gift is tax-free.
Tax arises only when you sell it.
The holding period of the original owner is considered.
Example: Grandmother bought in 1990; you sell in 2025 → long-term gain taxed at 12.5 %.
6️⃣ Declaring Gold in ITR
Not compulsory to list every ornament, but if your total income > ₹50 L, mention major assets under Schedule AL. Keep bills, gift deeds, valuations — they prove legitimacy if queried.
7️⃣ Legal Holding Limit (CBDT Circular No. 1916)
During a search, these amounts cannot be questioned even without bills:
Holder Permissible Gold 22K Value (Oct 2025)
Married woman 500 g ₹ 56.45 L
Unmarried woman 250 g ₹ 28.22 L
Married man 100 g ₹ 11.29 L
Total ≈ 850 g (~₹ 1 Cr)
➡ These are search guidelines, not ownership caps. More gold is fine if you have evidence of source (bills, gifts, inheritance).
8️⃣ How Gold Behaves vs Equities
• Low / negative correlation: Gold often rises when markets fall.
• Acts as hedge against inflation and currency depreciation.
• No dividend or coupon, so returns purely price-driven.
• Ideal allocation: 5–10 % of portfolio.
9️⃣ Sovereign Gold Bonds (SGB) — Complete Playbook
What They Are
Government of India bonds (issued by RBI) linked to gold price. You earn interest and redeem in cash based on the IBJA 999 gold rate.
🔗 RBI Official FAQ
Key Features
Parameter Details
Issuer Government of India / RBI
Tenure 8 years (early exit after 5 years on interest dates)
Interest 2.50 % p.a., paid semi-annually (taxable)
Redemption Cash = 3-day IBJA average price
Tax No capital gains tax if held till maturity
Limit 1 g min; 4 kg per FY for individuals / HUFs
Online Discount ₹ 50 per gram usually
Loan Collateral Accepted by banks/NBFCs
Example: Buy 100 g at ₹ 6 L. Earn ₹ 15 k interest per year. Redeem at ₹ 10 L → ₹ 4 L gain = tax-free if held till maturity.
Latest Availability (2025 Update)
According to recent public disclosures:
• No new SGB tranche has been announced for FY 2024–25.
• The scheme may be temporarily discontinued as it became costly for government borrowing
• Investors should watch RBI press releases for any new issues.
• Until then, the secondary market is the only route to acquire SGBs.
🔟 Buying SGBs via Secondary Market — Pros & Cons
Pros Cons
✅ Available when primary issue is closed ⚠ Thin liquidity on many series
✅ Sometimes at discount to intrinsic value (India Infoline) ⚠ Prices may trade at unjustified premium/discount (Moneycontrol)
✅ Choose residual maturity (near or long) ⚠ Lose tax-free benefit if sold before RBI redemption (Livemint)
✅ Tradable anytime through demat ⚠ Brokerage + bid-ask spread
✅ Possible quick exit before 8 yrs ⚠ Complex tracking of multiple series
Tax Angle for Secondary SGBs
• Sold < 12 months: STCG → tax as per slab.
• Sold ≥ 12 months: LTCG → 12.5 % (no indexation) per new regime.
• Held to maturity & redeemed by RBI: Capital gains = fully exempt.
Practical Tips
• Check trading volume before buying.
• Compare market price vs intrinsic gold value.
• Prefer series with ≥ 3–5 yrs left to maximize coupon + tax benefit.
• Include brokerage and spread in cost calculation.
1️⃣1️⃣ The “Taresh Gold Plan” for Your Portfolio
1. Assess your risk and time horizon.
2. Target allocation: 5–10 %.
3. Split: 60 % Gold ETF/FoF + 40 % SGB (if available).
4. Entry: Start SIP on Dhanteras (18 Oct 2025); buy SGB in next open window or secondary market series.
5. Review quarterly; rebalance annually.
6. Hold bills & statements for tax records.
7. Redeem SGBs via RBI to get tax-free gains.
1️⃣2️⃣ Checklist Before Buying Gold This Dhanteras
1. Buy with invoice showing GST split.
2. Track 24-/ 12-month holding period for LTCG.
3. Prefer ETF/FoF/SGB over jewellery for investment.
4. Keep inheritance records.
5. Know CBDT limits (500 g wife, 250 g daughter, 100 g husband).
6. Start a gold SIP on Dhanteras.
7. Monitor secondary SGB discounts for smart entry.
8. Review annually with your planner.
1️⃣3️⃣ Anecdote from My Practice
A client couple, Neha and Rajesh, once converted their Dhanteras budget into a ₹ 10,000 monthly gold SIP and ₹ 3 L SGB investment.
Over five years, they saw steady value growth and peace of mind when equities fell. Neha still jokes: “Our Dhanteras gold now pays interest!” — proof that discipline beats impulse.
1️⃣4️⃣ Final Reflection — Let Gold Be Your Ally
Gold is not your wealth engine; it’s your wealth seatbelt. It keeps you secure through every market turn.
This Dhanteras and Diwali, let your gold shine not in a locker but in your financial freedom plan.
🎯 Start your Gold SIP today.
📅 Watch for RBI updates on SGB revival or explore secondary-market opportunities wisely.
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CFP® Taresh Bhatia
(CERTIFIED financial-planner-gurgaon/" target="_blank" rel="nofollow">FINANCIAL PLANNER ® )
Founder — The Richness Academy
Guiding Indian families
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Disclaimer: The views expressed are for educational purposes only and do not constitute financial, investment, tax, or legal advice. Please consult qualified professionals before making decisions. Mutual fund investments are subject to market risks.
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The author of this article, Taresh Bhatia, is a Certified Financial Planner® and advocate for female empowerment. For more information and personalized financial guidance, please contact taresh@tareshbhatia.com
He has authored an Amazon best seller-“The Richness Principles”. He is the Coach and founder of The Richness Academy, an online coaching courses forum. This article serves educational purposes only and does not constitute financial advice. Consultation with a qualified financial professional is recommended before making any investment decisions. An educational purpose article only and not any advice whatsoever.
©️2025: All Rights Reserved. Taresh Bhatia. Certified Financial Planner®
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