Gold Investment Calculator India — SGB vs ETF vs Physical Gold
Compare Sovereign Gold Bond (SGB), Gold ETF, and physical gold returns after tax. Calculate how many grams you bought, current value, CAGR, and capital gains tax. SGB maturity proceeds are tax-free; Gold ETF LTCG is 12.5% after 12 months under Finance Act 2024. Gold price reference: ₹1,50,000 per 10g (24K, March 2026). Prices are volatile — verify before investing.
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How to Use This Calculator
Gold Returns tab
Enter your investment amount, the purchase price per 10g when you bought, and the current gold price per 10g (default ₹1,50,000 as of March 2026). The calculator shows grams bought, current value, absolute return percentage, and CAGR if you also enter the holding period. Tax on capital gains is computed based on whether you held for less than or more than 2 years.
SGB vs ETF vs Physical tab
Enter the investment amount and holding period. The calculator compares the same sum invested in three vehicles: Sovereign Gold Bond (earns 2.5% interest + tax-free redemption at 8 years), Gold ETF (12.5% LTCG after 1 year, minus expense ratio), and Physical gold (making charges reduce effective investment, 12.5% LTCG after 2 years). Use the "More options" to adjust SGB interest, ETF expense ratio, making charges, and your tax slab for SGB interest income.
Gold in Portfolio tab
Enter your total portfolio value, current gold allocation, and target gold percentage. The calculator tells you how much additional gold to buy, which vehicle to use (SGB recommended for most), and how your target compares to standard allocation benchmarks (5–15%).
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The Formula
Gold investment returns and tax are computed as follows:
Grams = (Investment ÷ Purchase Price per 10g) × 10
Current Value:
Current Value = (Grams ÷ 10) × Current Price per 10g
Absolute Return:
Absolute Return = Current Value − Investment
Absolute Return (%) = (Absolute Return ÷ Investment) × 100
CAGR:
CAGR = (Current Value ÷ Investment)1/Years − 1
LTCG Tax on Physical Gold / Gold ETF (post Finance Act 2024):
Physical gold (held ≥ 24 months): 12.5% × gain + 4% cess
Gold ETF (held ≥ 12 months): 12.5% × gain + 4% cess
STCG (below holding period): at income slab rate + cess
SGB Net Value:
SGB = Gold appreciation + (2.5% × Issue Price × Years) − Tax on interest
SGB maturity (8 years): redemption proceeds are FULLY tax-free
Gold ETF Net Value:
ETF = Investment × (1 + Gold Return − Expense Ratio)Years − LTCG Tax
Physical Gold Net Value:
Effective investment = Investment ÷ (1 + Making Charges %)
Physical = Effective Investment × (1 + Gold Return)Years − LTCG Tax
The Finance Act 2024 (Budget July 2024) was a landmark change for gold taxation: LTCG rate was reduced from 20% (with indexation) to 12.5% (without indexation) for both physical gold and gold ETFs. The holding period for Gold ETFs was simultaneously reduced from 36 months to 12 months. SGB maturity redemption continues to be tax-free under Section 47(viic).
Example: Priya Comparing ₹5L over 8 Years
Priya — ₹5,00,000 to invest in gold, 8-year horizon, 30% tax slab
Priya has ₹5,00,000 to allocate to gold as part of her investment portfolio. She is in the 30% tax slab, has an 8-year horizon, and is comparing SGB, Gold ETF, and physical gold jewellery. Gold price assumed: ₹1,50,000/10g today, growing at 10% p.a. Gold prices are volatile — verify before investing.
Step 1: Sovereign Gold Bond (SGB)
Step 2: Gold ETF
Step 3: Physical Gold (jewellery, 12% making charges)
Result
SGB wins by ₹1,73,919 over ETF and ₹2,42,894 over physical gold over 8 years. The tax-free maturity benefit of SGB is transformative for long-term investors. For shorter horizons (under 5 years), Gold ETF is more flexible as SGB cannot be redeemed before the 5th year.
FAQ
- Interest: 2.5% p.a. on the issue price, paid semi-annually. Taxed at your income slab rate as IFOS.
- Tenure: 8 years. Early redemption allowed from the 5th year anniversary (but only on coupon payment dates).
- Tax-free maturity: Capital gains on redemption at maturity are completely exempt from tax (Section 47(viic)).
- No storage risk: Held in Demat or physical certificate form. No making charges, no storage cost.
- Sovereign guarantee: Backed by the Government of India — zero default risk.
- Making charges: 8–25% on jewellery, added to purchase price. Coins: 2–5%. These are non-recoverable costs that reduce effective investment.
- GST 3%: Applicable at purchase on the gold value plus making charges.
- Storage & insurance: Bank locker rent (₹1,500–3,000/year) or home insurance.
- Hallmarking risk: Purity verification needed; BIS hallmark mandatory since 2021.
- Resale discount: Jewellers typically offer 5–10% below prevailing gold price when you sell.
- LTCG tax: 12.5% (post Finance Act 2024) after 24-month holding period. No indexation benefit.
- Conservative / near-retirement: 8–12%. Gold as inflation hedge and safe haven.
- Balanced / accumulation phase: 5–10%. Diversification without over-allocation.
- Young investors: 5–8%. Prioritise equity for long-term growth; gold as small hedge.
- High inflation environment: Up to 15%. Gold historically performs well when inflation is high.
- 3% GST: Payable on purchase, same as physical gold.
- Storage fee: 0.4–0.8% per year after an initial free period.
- Platform risk: Digital gold is not regulated by SEBI. There is no investor protection if the platform fails.
- No RBI/SEBI backing: Unlike SGBs (government) or ETFs (SEBI-regulated), digital gold has no regulatory protection framework.
- Tax: Taxed exactly like physical gold — LTCG after 24 months at 12.5%.