The vehicle ledger
Same metal. Three doors. Three completely different post-tax returns.
The spot moves the same on all three lines. The yield, the lock-in and the tax treatment do not. Five columns most people never compare before buying.
Post tax return = Spot move + Coupon yield - Acquisition load - Exit tax
SGB
Sovereign Gold Bond . secondary market only since 2024 pause
2.50pct pa
Coupon on issue price paid half yearly
0pct GST
No GST on bond. No making charge. Often trades at 3 to 6 pct discount to spot.
0pct
Capital gain tax free at 8Y maturity. LTCG 12.5 pct if sold on exchange.
8.0years
Exit after Year 5 on coupon date. Exchange anytime.
ETF
Gold ETF . holds physical gold in vault
0pct
Spot move only. Storage built into expense.
0.50pct TER
Annual expense ratio. No GST at unit level. No making charge.
12.5pct LTCG
After 12 months. Slab tax if held under 12 months. Rs 1.25L exemption shared with equity.
T plus 1
Fully liquid. Trades like a stock.
Physical
Coin . bar . jewellery
0pct
Negative effective yield once storage and insurance are counted.
3 to 25pct
3 pct GST plus making charge 8 pct on coins to 25 pct on jewellery. Buy back loses making charge.
12.5pct LTCG
After 24 months. Hallmark and bill required. Slab tax under 24 months.
None
Liquid but sale price is dealer quoted. Locker rent and insurance recurring.
Rs 100000 in . eight years . assume gold spot CAGR 7 pct over the hold . net cheque the day you walk out
SGB held to maturity
Rs 191620
Gold ETF sold at 8Y
Rs 156680
Physical jewellery at 8Y
Rs 142220
The arithmetic the brochure does not run
Same metal. Same spot move. The gap between the SGB and the jewellery cheque is Rs 49400 on a Rs 100000 ticket. Almost half the original capital, paid silently in entry loads and exit tax, on a vehicle decision retail makes at the showroom counter. Card three is the three rules and the closer.