Until now, there were options like digital gold, gold ETFs and government gold bonds (SGB) for investment. However, now a new way of investing in gold is very popular in the market. The name of which is Tokenised Gold. It is considered the future of investment in gold. But is this really a new invention or is there a big danger lurking in it? Let’s know the detailed information about it.

Tokenized Gold, how does it work?

Tokenized Gold means a digital token based on blockchain technology. In it real gold is kept in safe vaults. And you get a token of it in digital form. It has the advantage that there is no need to carry your gold coins or bars. You can also buy a small fraction of gold for less money. However there is definitely one problem with tokenized gold. And that is that gold doesn’t come under any major rules or regulations like ETFs in India.

Tokenized Gold vs ETF vs Digital Gold

Gold ETF: Experts consider it better because it can be easily sold in the market anytime. Long-term capital gains tax of 12.5 per cent is levied on holding for more than 12 months.
Digital Gold: It is easy to buy in small amounts, though it is subject to 3 percent GST and an extra charge of 2 to 5 percent (Buy-Sell Spread).

Physical Gold:Jewelry or coins incur a making charge of 8 percent to 25 percent. Along with this, there is also the hassle of handling it.

Tokenised Gold: You can trade anytime 24 hours a day. However, it is heavily taxed in India. It is considered as a Virtual Digital Asset (VDA/Crypto) and attracts a direct 30 percent flat tax and 1 percent TDS on its profits.