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What is Digital Gold? Benefits, Risks & Taxation. Step-by-Step Guide

April 21, 2023

Table of Contents

    Table of Contents

      An Extensive Guide to Digital Gold Investments with expert advice. Debunking all myths & confusions around Digital Gold for Smart Investors.

      What is Digital Gold? How to buy 24k Pure Gold Online Safely

      Digital gold is a new age version of buying gold through online channels. You can buy 24k Pure Gold Online with the Assurance of Gold Purity, Maintenance & Storage Safety.

      It is a more convenient and cost-effective alternative for those who want to buy gold and start their Gold Investment Journey from anywhere on the Planet.

      You can buy and sell Digital Gold with just a tap of your finger by using Jar App but it is suggested to keep your Gold Investments for longer period to get the maximum profit, but if you still want to buy & sell then you must read Buying and Selling Price Spread on Digital Gold before investing.

      The above mentioned article will give you a better understanding of Return on Gold Investment and you can start Saving & Investment in Digital Gold.

      For every gram of Gold you buy, there is an actual 24k Pure Gold stored in a locker in your name by one of the three authorised gold banks in India - Augmont, MMTC PAMP and SafeGold.

      Investors can Buy or Sell Digital Gold anytime and Order physical Gold(Ganesha or Lakshmi Coins, Bars, etc) to be delivered to their homes with just a tap by using Jar App.

      Also, there is no minimum limit to buying digital gold. You can start from as low as ₹10.

      In this article, we deep dive into every aspect of this New-Age form of the Precious Yellow Metal popularly known as 24k Pure Digital Gold.

      what is digital gold
      What is Digital Gold?

      Is Digital Gold a Good Investment?

      Imagine this, you go to a jewellery shop and buy a piece of jewellery at a listed price from the Jeweller.

      You need to pay an extra 10% for the making charges.

      Then, you take it to your home and safely store it in your locker. Sounds good so far, right?

      The following two scenarios can occur after this:

      • There is risk of losing your gold due to robbery or gold snatching or misplacing.
      • Even if it is safe, when you use it after few years, the design could get outdated, and need to be polished, resulting in spending more than you already invested.

      Now, imagine this.

      You buy the same amount of gold online, which is 24k Pure Gold & Stored Safely in Vaults Insured by Authorised Gold Sellers of the same.

      You can start investing in Digital Gold from as low as ₹10 and in the future, you can either sell it at market price or have it delivered to your doorstep in physical form.

      All of this by just using your smartphone!

      Sounds too good to be true? Thanks to SafeGold, due to which now you can Buy Digital Gold online. With the Jar App it is even better, where you can automatically invest your spare money or a set amount into Digital Gold on a Daily Basis.

      Digital gold’s rise in popularity among Millennials and GenZers is hugely credited to the flexibility of purchasing it in small amounts, easy access to delivery, and liquidity options.

      When you buy digital gold from any app, you’re actually buying from mediators helping you access that gold from reputed companies like Augmont Gold Ltd, Digital Gold India Pvt. Ltd. - SafeGold, and MMTC-PAMP India Pvt. Ltd.

      Intermediaries charge a small percentage as investment charges as they are responsible for the safety of your digital gold holding.

      Advantages of Investing in Digital Gold

      • Digital Gold is easy to track and can be accessed any time from your Smartphone
      • It offers high liquidity and can be bought and sold at any time of the day at market rates
      • With country-wide lockdowns and jewellery shops being closed, Digital Gold trader Augmont Gold Ltd. saw its businesses increase by 40-50% during the lockdown period. This just goes to show that many people have been moving towards Digital Gold
      • Gold is touted to be a hedge against inflation and can be used as collateral for loans
      • Gold also helps in diversifying your portfolio, thus it is the first choice among Smart Investors
      • Gold rates have been increasing for the past 92 years. Apart from having cultural importance in India, gold also has intrinsic value and has been a great asset with even better returns YoY.

      Disadvantages of Digital Gold Investment

      • You have to pay 3% GST extra on your Purchase, which is minimal for Smaller Investments but can be an issue for large amount of Investment.
      • Another point of concern is that digital gold does not come under the regulations of the RBI or SEBI but it is backed by SafeGold, MMTC-PAMP & Augmont Gold in India.
      • The maximum amount of investment in gold is limited to Rs. 2 lakh on many partner platforms which may pose a barrier to some investors
      • During the delivery of digital gold, holding companies charge a small management fee for holding the gold for you

      Considering the Easy Liquidity, Purity, Safety, and Delivery options, even the disadvantages of investing in Digital Gold don’t seem so bad and it is a better option from an Investor's point of view when comparing it with buying Physical Gold such as Jewelleries.

      Taxation on Digital Gold & Physical Gold

      Capital gains from the sale of physical gold are taxed based on whether it is short-term or long-term capital gains.

      If you sell your gold assets (which may be gold jewellery, digital gold or coins) within three years from the date of purchase, any proceeds from that sale will be considered Short-Term Capital Gains(STCG).

      Read a detailed guide on how taxation works on Digital Gold Investment & Physical Gold Investment.

      Is Digital Gold Costly?

      No, Digital Gold isn't costly compare to Physical Gold as it doesn't include making charges or wastage charges as it is not made yet. It is 24k 99.9% pure Gold kept in the Safe Locker.

      You can buy Digital Gold for just ₹10 from the Jar App and start your Digital Gold Investment Journey.

      What is the Digital Gold Price today in India?

      You can Download & Install Jar App to get Daily Reminders on Current Digital Gold Price and automate your Investments as well.

      You can also visit our Live Digital Gold Price page to know the Live Price of Digital Gold and start your Daily Savings Journey.

      What if you lose your smartphone, will your Gold disappear?

      Nope! Just like stocks from the share market, digital gold is also registered in your name.

      It is stored securely in vaults insured and verified by an independent trustee.

      This ensures the safety of your gold, even if the app you used to buy gold from, disappears!

      Where & How to buy Digital Gold?

      There are many Digital Gold Buying Platforms from where you can start Investing in Digital Gold but by using Jar App you can Automate your Daily Investment in Digital Gold by using "Daily Savings", "Round-Off" or "Savings Plan" features available on the Jar App.

      Jar App is a Daily Savings App where you can start Investing in Digital Gold for as low as ₹10. Jar App encourage its users to inculcate the habit of savings with automation and invest those savings in Digital Gold for better returns.

      Powered by SafeGold and the best UPI service providers in the market, the Jar app automatically invests your savings in this popular asset, therefore promoting a habit of saving daily. To learn more check how to use the Jar App.

      Digital gold can be bought without KYC but only up to a certain amount depending on the platform used to buy it.

      On some popular apps up to ₹50,000 worth of gold can be bought without any requirement of KYC.

      On the Jar App, you can buy up to 30 grams of digital gold without KYC.

      Just like shopping online, digital gold can also be purchased easily with just tap of your finger.

      You can buy 24K Digital Gold from Jar App as Instructed below

      Jar App helps their users to Automatically Save & Invest in Digital Gold on a Daily, Weekly or Monthly basis, starting from ₹10 and inculcate the habit of Savings.

      • Install & Open the Jar App.
      • Tap on the Hamburger Menu Icon at the Top Left Corner
      • Then, tap on the "Save Now" Icon.
      • Enter the Amount in Rupees or in Grams of Gold you wish to Buy.
      • Then tap on the “Continue” button at the bottom right corner.
      • And don't forget to Get Extra Gold by using the Coupon Codes; if available to you.
      • Now you can Make payments using UPI Apps and banks available to you.
      • Next, the amount of Gold Credited will be updated instantly and your Digital Gold will be stored in a 100% Insured Vault.
      • Digital Gold can be sold or bought instantly. Investors can also get their digital gold delivered to their homes either in the form of coins or bars.

      Who should buy Digital Gold?

      Anyone who cannot afford to buy a physical form of gold, or cannot invest great sums at a time into the yellow metal can go for digital gold.

      Digital gold-backed by 99.9% 24 karat purity and can be bought for as low as ₹1 via Jar App which means one doesn’t have to worry about storing it in a safe place.

      All you need is the Jar App on your phone, and you're set. You can auto-invest your money on Jar also. Check Jar's FAQs to learn more.

      Digital gold can also be bought from different intermediaries who facilitate buying of digital gold.

      Digital gold can be bought and sold instantly at market rates, which means no visiting different jewelry shops asking for discounts on making charges!

      Investors can invest in other forms of digital gold such as Gold Bonds and Gold ETFs which are regulated by SEBI and RBI.

      When compared to SGBs digital gold seems like a lucrative option for micro investments & the flexibility of redemption.

      Digital gold, unlike SGBs, can be bought and sold instantaneously via the platform one used to invest in it.

      SGBs however have a tenure of 8 years but encashment/redemption of the same is allowed only after the fifth year after the date of issue.

      When it comes to mutual funds and ETFs, one has to pay hefty expenses including expense ratio and other relevant charges to the fund managing companies.

      In conclusion, digital gold seems like a good option for all those who want to start out in the investment ecosystem with easy-to-invest options.

      One of the best things about digital gold is the flexibility that comes along with it.

      The ease of selling and buying at any time of the day along with ease of delivery make it a great option for people who want to save gold for future use.

      There are many easy ways to buy digital gold one of them being the Jar App which lets you auto-invest in the yellow metal in the easiest way possible.

      Jar App can help you achieve your financial goals by helping you save daily out of transactions you make.

      Jar App automatically invests your saved change into digital gold and this will help you accumulate digital gold for a secure future.

      You can have a better understanding about Digital Gold Investment & how it is a good option to diversify your portfolio with the below Infographics as well.

      How digital gold investment works