In this comprehensive blog, let us know the best gold ETFs in India but before that let us know what is Gold ETF.
What’s Gold ETF?
A Gold ETF investment is a mutual fund that invests in Gold and it is based on commodities. Similar to individual stocks, these Exchange Traded Funds operate and are traded on the stock exchange Gold ETFs have become increasingly popular among investors in recent years.
Gold ETFs monitor gold prices and do not require storage. If you are an investor, you need to frequently struggle to select the top Gold ETFs.
Related Post: Check exchange traded funds article to know more
How to Invest in the best Gold ETFs?
You need to have a Demat account and an Online Trading Account to trade in a gold ETF. To open an account, you would require a PAN Card, address proof and identity proof. After the account is ready, you can choose a Gold ETFs and place an order.
“Do check out the Zerodha Demat Account and Upstox Demat Account.”
Benefits of Investing in Gold ETFs
Here are the two major benefits of investing in gold ETFs:
- Convenience Access and Storage
Gold ETFs are stored in Demat accounts which are easy to access and store whenever it is required. Gold ETFs are like equity contracts which can be easily exchanged.
If you invest in Gold ETFs in the form of short-term or long-term there will be a tax exemption on the returns you get. Long-term gains are taxed at 20%, and short-term gains to your income are taxed according to the tax slab rates.
Suggestions: Using the Intradayscreener, you can easily find the best stock to trade in the stock market
How to Choose the Best Gold ETF?
Before choosing the best gold ETF stock to invest in, you should consider the following points
1. Performance of the Fund
Understanding the historical data of the fund’s past performance plays a vital role in choosing the best gold ETF investment. Most Experts suggest considering a minimum of 3 years of data on the average returns should be consulted.
2. Liquidity of an Asset
You need to choose ETFs based on their trade volumes. Some Gold ETFs may not experience fluctuations, whereas others may undergo hourly spikes or drops in price.
3. Error in Tracking
It is essential to track the underlying index before considering an ETF. If there are any differences between the fund’s NAV and the actual value of gold then it is a tracking error. These imply additional fund management charges and other transaction charges. So it is always best to consider an ETF with minimum tracking errors.
How are Gold ETFs Taxed?
The Gold ETF funds fall under the paper gold investment category. Below are the tax norms:
1. For long-term capital gains
A tax rate of 20% is applicable on ETF units after which are sold over 3 years. An investor is also eligible for indexation benefits in the case of LTCG.
2. For short-term capital gains
The returns earned upon sale of the units within 3 years are taxed as per the income tax slab rate that is applicable to the individual.
Best Gold ETF in India
Here is the list of the Best Gold ETF in India
|S.No.||Best Gold ETF in India|
|1||HDFC Gold ETF|
|2||SBI Gold ETF|
|3||IDBI Gold ETF|
|4||Axis Gold ETF|
|5||Kotak Gold ETF|
|6||Aditya Birla Sun Life Gold ETF|
|7||Nippon India Gold ETF|
|8||Invesco India Gold ETF|
|9||Quantum Gold ETF|
|10||UTI Gold ETF|
We hope this blog on the Best gold ETFs in India to invest in is helpful to learn more about gold Exchange-traded funds.