 "Jewellery")
Many people will buy gold this Dhanteras. Most of the buying is likely to be in physical form—as jewellery, bars, and coins. Buyers need to pay heed to a few points when making such physical purchases.
Jewellers say the demand for physical jewellery is up this year. Aditya Pethe, director, Waman Hari Pethe Jewellers says, “We expect a 25-30 per cent rise due to pent up demand and revenge shopping. Also, a lot of people who sold gold last year in distress are replenishing it now.”
Offline purchase
Physical gold should ideally be bought from a reputed jeweller, and it must be hallmarked. Hallmarking means the gold’s purity is assured by the Bureau of Indian Standards (BIS).
Surendra Mehta, secretary, Indian Bullion and Jewellers Association (IBJA) says, “Even when buying from a local jeweller, stick to hallmarked jewellery. Hallmarking is mandatory in 256 districts only. It is not mandatory in the rest.” Jewellers with annual turnover up to Rs 40 lakh are also exempted from mandatory hallmarking. Mehta says it is up to the buyer to ensure he purchases hallmarked jewellery in such places.
Avoid banks when buying gold coins and bars as they usually charge a premium (though they do offer hallmark and internal assay certifications).
If you buy gold jewellery, you will have to shell out making charges. The craftsmanship charges could range from Rs 600 per gram for ordinary pieces to Rs 1,500 per gram for branded jewellery and exotic designs.
Mehta adds, “Always enquire about the return and exchange policy, deduction to expect when selling the piece back, whether the piece is eligible for a gold loan from banks, etc.”
Digital purchase
Buyers who want convenience buy gold online, mostly bars and coins. Pethe says, “You can buy digital gold online at our website and get physical gold delivered to your home within 24 hours.”
Apart from jewellers, players like Paytm, Mobikwik, PhonePe, etc also sell gold digitally. Each platform has another seller at its backend.
Terence Lucien, head of mutual funds and gold, PhonePe says, “For customers who don't want immediate delivery of their gold coins and bars, or who choose to buy in smaller quantities, our gold partners hold 24 carat physical gold in insured, bank-grade lockers for every purchase made by the customer.”
You can store the gold in the seller's vault at no cost for two-five years and sell or withdraw it anytime during this period.
When you buy online, make sure you buy from legit sellers who are registered with the BIS. Mehta says, “Find out who the custodian is.” There is no regulator for digital gold at present.
Keep in mind these nuances
Be cautious when buying studded jewellery. Mehta says, “Pay separately for the gold and the stone. The stone should not be included in the weight of gold. Not many know about this and get a bad deal.”
If the jewellery weighs 100 gm and the set stone weighs 10 gm, ensure that you pay for 90 grams of gold and not 100 grams. Government rules exempt kundan, polki and jadau from hallmarking, so watch out as you could be sold sub-standard quality stuff.
Finally, always get a bill for your purchases. And make sure the jeweller you buy from will be ready to take the jewellery back if you wish to sell it.
How physical gold is taxed
- If physical gold has been held for more than 36 months before transfer, the gains arising from it are regarded as long-term capital gain (LTCG)
- LTCG is taxed at 20 per cent with indexation
- If the gold or gold jewellery is sold within 36 months of purchase, the gain will be considered as short-term capital gain (STCG)
- Short-term capital gain on gold is taxable at the applicable tax rate Source: NA Shah Associates
