There is an increasing clamour to invest in gold owing to the impact of rising inflation coupled with stock market volatility. The need to diversify into gold investments cannot be ruled out. However, the risk-reward component along with the taxation aspect differ in all of them.
Even though the interest accrued on SGBs is subject to taxation, the capital gains exemption after eight years, coupled with the potential for long-term capital gains featuring indexation benefits, positions SGBs as a tax-efficient alternative when contrasted with other gold investments.
By bringing the import duty on gold back down to 2%, the government could squeeze out the space for smuggling, improve tax compliance, and encourage larger remittances