For most Indians, gold is more than an investment — it’s an emotion tied to tradition, festivals, and family milestones. But when it comes to returns, experts believe that the
CA Nitin Kaushik explained how many buyers overlook the real expenses that come with owning gold jewellery or coins. “People love buying gold,” he wrote on X. “But most don’t realise how much quietly slips away in the process.”
According to Kaushik, “You pay 3% GST at purchase, plus a 5–8% jeweller markup if you’re buying jewellery,” he explained. “Add 0.5–1% for annual locker charges if you keep it in a bank, and another 2–5% when you sell — that’s nearly 10–15% gone before your investment can even shine.”
These expenses mean that gold jewellery, though beautiful, often struggles to deliver good returns compared to its market price. The emotional appeal remains strong, but from a financial point of view, it may not always make sense.
For investors who want exposure to gold without dealing with storage or making charges, Gold Exchange-Traded Funds (ETFs) are gaining popularity. “If returns matter more than tradition, consider Gold ETFs,” Kaushik advised. “They charge just 0.3–0.4% per year and give you exposure to the same metal — without making charges, purity doubts, or locker stress.”
Gold ETFs have become an attractive alternative because they allow investors to buy and sell gold digitally through the stock market. They are fully backed by physical gold, making them both secure and transparent.
“Gold ETF inflows surged significantly this year as Indian investors got smarter about costs and liquidity,” he noted. The shift suggests that many are now viewing gold as a financial asset rather than just an ornament.
Interestingly, both physical gold and Gold ETFs are treated similarly for tax purposes. “Both get 20% long-term capital gains tax after three years, with indexation,” Kaushik explained. “But the costs and hassles are not the same.”
In simple terms, physical gold still carries emotional value, but Gold ETFs are proving to be a smarter choice for investors seeking better returns and convenience. Traditional gold may glitter, but smart investing shines brighter.