Gifting gold this Diwali? Stick to reputed jewellers to ensure quality

While gold has always been the preferred, traditional choice of gift, this Diwali is different. The pandemic has made it difficult for shoppers to step out, purses have tightened, and gold is trading above Rs 50,000 per 10 grams.  

During Diwali, you should invest or gift an asset that grows in value. Priti Rathi Gupta, founder of Lxme, backed by Anand Rathi Investment services, a financial planning platform for women says, “Buying gold or silver is considered auspicious as traditionally it was the only known store of value”. So, despite the high prices, many will still gift gold.

Nowadays, you can purchase physical gold online through e-tailers, branded jewellers, and banks. Amazon’s Dhanteras Store is offering gold and silver coins, festive jewellery, etc. You can also buy coins and jewellery from brands like Joyalukkas, Malabar, PC Chandra, Mia by Tanishq, and several others. Discounts of up to 20 per cent are available on gold coins. Tanishq is offering up to 25 per cent discount on making charges. Joyalukkas is giving a 200 mg gold coin free on purchase of gold jewellery worth Rs 50,000 and above.

Though banks also sell physical gold coins, experts do not recommend buying from them, as they don’t buy it back when you wish to sell.

To the discounts available from sellers, you can add an extra 10 per cent discount by purchasing via a State Bank of India credit card. Ashwini Kumar Tewari, managing director and chief executive officer, SBI Card, says, “This year we have curated over 1,000 offers, with national and local merchants, both in-store and online, across 2,000 cities.” This discount is available from November 10-13, the maximum being 10 per cent or up to Rs 1,500 on card value. Another option is to buy digital gold, sold by mobile wallets like Paytm. However, you need to pay extra making charges for physical gold and delivery charges. Mrin Agarwal, founder-director of Finsafe India says, “I don’t recommend buying digital gold through apps as they are not regulated”. 

Electronic gold is the way to go if you are buying the yellow metal for building wealth. Rathi Gupta says, “Sovereign gold bonds (SGBs) not only offer tax benefits but also give a return of 2.5 per cent per annum. It should be the preferred option, provided you are willing to lock in money for eight years.” The issue price for the latest tranche of SGBs is Rs 5,177 per gram. SGBs can be gifted.

Compare costs to decide which of these options to gift (see box). And only go for reputable sellers to ensure quality.  

Finally, as for taxation of gold, the recipient does not have to pay any tax when she receives gold as a gift from blood relatives, but when you sell it, you are liable to pay capital gains tax if you make a profit.