InvestorQ : How are gold ETFs ranked in terms of tax efficiency and how do they rank with other asset classes?
prachi Patwardhan made post

How are gold ETFs ranked in terms of tax efficiency and how do they rank with other asset classes?

Answer
user profile image
Moii Chavate answered.
1 year ago


Gold funds have certain distinct advantages vis-à-vis physical gold. Being a financial asset, it is not subject to wealth tax unlike physical gold. Secondly, the definition of long term capital gains in case of gold ETFs is 1 year and not 3 years as in case of physical gold. But it needs to be remembered that gold ETFs attract STCG tax at peak rate and LTCG tax at 20% after considering indexation benefits. To sum it up, gold ETFs do offer some advantages over physical gold. But from a personal finance perspective, gold ETF is just one form of gold and to that extent it must fit into your overall gold exposure laid out in your financial plan.