How to Buy Digital Gold in India?

Purchasing digital gold has grown popular in recent years. This is due to the ease with which digital gold may be purchased. Unlike gold jewelry, digital gold may be purchased for one rupee and does not incur any manufacturing costs. However, there are a few things to bear in mind while purchasing digital gold. Continue reading to learn more about it.

People who find it difficult to buy actual gold owing to high expenses are increasingly turning to digital gold. Unlike gold jewelry, digital gold may be acquired for as little as Re 1 and there are no production expenses. Furthermore, an investor can swap digital gold for an equivalent weight of gold coins or sell it and get funds in a bank account, depending on his or her preference and convenience.

If you want to buy digital gold during Akshaya Tritiya or Diwali, here's all you need to know.

Purchasing digital gold on the internet

You may now purchase digital gold from MMTC-PAMP, SafeGold, Augmont Gold, and other firms. Individuals may buy digital gold by visiting the websites of these companies. Many of these businesses also have partnerships with payment applications like Paytm, Google Pay, and PhonePe to purchase and sell digital gold.

Recently, several jewelers have begun to provide digital gold. The service is provided through a partnership with a digital gold brand or through an in-house brand. Tanishq, for example, has partnered with SafeGold to provide consumers with digital gold. PC Jewellers, on the other hand, has created a platform known as PCJ Digital Gold to provide this investment.

Purchasing digital gold with Paytm, PhonePe, or Google Pay

Buying digital gold is simpler if you use popular payment applications such as Paytm, PhonePe, or Google Pay. Individuals must launch the app and pick the "Digital Gold" or "Gold" option. The following step is to enter the purchasing price. The program also supports gram purchases. Make the payment (by UPI, mobile wallet, debit card, etc.) after the input (Rupee or gram) has been submitted. The gold is added to the customer's digital gold account if the payment is successful.

Paytm has a partnership with MMTC-PAMP. PhonePe customers may buy digital gold via MMTC-PAMP or SafeGold. The variation in gold prices between these platforms is negligible.

Please keep in mind that the rates displayed by these applications are normally valid for 5-7 minutes and are exclusive of GST, which is applied at a rate of 3%.

Google Pay has partnered with MMTC-PAMP to provide its users with digital gold. The platform's price includes taxes and is updated every 5 minutes.

Minimum and maximum purchases: The terms and conditions for maximum purchases vary amongst the three payment applications. The daily limit for Google Pay is Rs 50,000. The minimum buying amount is Re 1. However, gold accumulation plan (GAP) accounts with more than Rs 49,999 in gold must comply with KYC requirements before making any additional purchases.

Individuals may buy gold for as little as Rs 1 and as much as Rs 49,999 each purchase, according to PhonePe. PhonePe allows you to hold a maximum of Rs 2 lakh in gold.

Paytm allows anyone to buy gold for as little as Rs 1 and as much as Rs 1 crore in a single transaction. PAN data must be given if an individual purchases digital gold worth Rs 2 lakh or more.

Maximum keeping duration: The maximum holding term for digital gold might differ from one firm to the next. MMTC-PAMP permits a buyer to store gold in a digital locker for five years, whilst SafeGold allows for seven.

Storage fees: After purchasing digital gold, the firm (SafeGold/MMTC-PAMP) will keep the gold in a safe vault. As a result, one must be aware of the fees associated with storing gold in these lockers. According to the PhonePe app, both MMTC-PAMP and SafeGold allow buyers to retain the gold for free for up to 5 years. SafeGold then charges a custodial fee of 0.3% each year. In the case of MMTC-PAMP, after 5 years, the gold must be sold or exchanged for a gold coin.

Purchasing digital gold through websites

Digital gold may be acquired via the websites of MMTC-PAMP, SafeGold, Augmont, and a variety of other companies. The terms and conditions, however, may vary. If the purchase exceeds a certain level, the buyer may be required to go through the KYC procedure. When purchasing SafeGold for more than Rs 2,000, a PAN is required. PAN is necessary, according to Augmont, if the purchase surpasses a particular threshold level. This limitation, however, is not noted on the company's website. "MMTC-PAMP, on the other hand, does not require the customer to complete KYC to open a GAP account or buy digital gold," according to the website.

Minimum and maximum purchase amounts: MMTC-PAMP and Augmont accept purchases beginning with Re 1. SafeGold, on the other hand, has a Rs 10 minimum purchase quantity. The maximum quantity of gold that may be purchased from here is unlimited.

Selling digital gold: Selling gold on payment applications is simpler. However, this cannot be said for some websites. When the "sale back window" is open, hoarded gold can be sold, according to MMTC-PAMP. "The open sale back window is the time period during which a customer can request the sale of their digital gold." MMTC-PAMP maintains the right, at its sole discretion, to close the open sale back window. Customers will still be able to request that their digital gold be redeemed in the form of gold coins, according to the website.

It states, "You are not allowed to sell the gold or silver until 48 hours from the purchase time for security reasons."

SafeGold requires a 48-hour waiting time after purchase before selling "for security reasons." According to the website, "your PAN is required once your cumulative sell transaction value exceeds Rs 500." This is done to ensure that you genuinely own the bank account to which you want to withdraw your sale revenues (via NEFT or UPI) (by comparing the name returned from the bank account against the name retrieved from the PAN)."

Storage fees: The free storage duration and fees for payment applications are the same as indicated before.

Things to consider when investing in Digital Gold

• The minimum investment varies depending on the platform. Some applications enable users to contribute as little as Rs 1, while others require a minimum investment of Rs 100.
• Maximum investment: You may invest up to Rs 2 lakhs in digital gold.
• Locker fees: While most applications do not collect locker fees, some do. As a result, it's important to verify locker costs before investing because they are taken from the capital.
• Maximum keeping term: For digital gold, the maximum holding period is five years. You must then either sell it or convert it into actual gold.
• Convertibility to actual gold: Not all applications support the conversion of digital gold to physical gold. Choose a platform that allows you to convert your digital gold to physical gold.
• GST: There is a 3% GST (goods and services tax) for digital gold, which is deducted from the primary amount. As a result, while buying in and selling digital gold, make sure to account for GST.
• Capital gains taxes: When selling your gold, it is important to consider taxation. Regardless of the holding period, capital gains on gold are taxed at your income tax bracket rate.