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| Why
Invest in Gold |
| Adding gold to
a portfolio introduces an entirely different asset class- a
tangible & real asset which increases the portfolio's degree
of diversification. |
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| Effective portfolio diversifier |
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- As depicted above, while the overall
return of a portfolio without gold is 14%, that of a portfolio
with gold is over 16%. Hence an allocation of physical gold
in a financial portfolio not just helps reduce the impact
of the volatility created by the other asset classes like
equity, bonds etc., but also increases the average return
over a period of time.
- A financial portfolio containing gold
is generally more robust because it improves the stability
and predictability of better average returns.
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| Superior to other alternative
asset classes |
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- Gold is the most liquid asset class
due to its universal acceptance as an alternative to currency,
and also because globally, the gold market is functional
24x7.
- Same cannot be said about any other asset
class as they take much longer time to liquidate (from 1
day to upto 3-4 months).
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| Effective hedge against
currency risk |
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- Due to its inverse relationship to dollar,
gold has always proved to be an effective hedge over a period
of time.
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| Effective hedge against
Inflation |
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- A study conducted by WGC in UK shows
that one ounce of Gold would consistently purchase the same
amount of goods & services as it would have done 400 years
ago, making it the perfect hedge against inflation over
a long period of time.
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| Other Reasons |
- More liquid as compared to the other
asset classes Gold can be bought, sold or traded globally.
- Performance of gold not linked to performance
of any company, industry or government.
- Gold needs no professional manager
unlike mutual funds
- Gold is an asset, which is not simultaneously
a liability, unlike stocks.
- It doesn't require political & social
stability to survive, in fact it thrives under worst societal
conditions.
- Gold doesn't ever loose its intrinsic
value.
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Inspite of the
growing demand for gold in India, average retail household has
seldom considered “investing in gold” because of
the absence of an efficient and effective platform.
MCX bridges this requirement by introducing an ideal investment
platform for investment in gold by retail household. “i-gold
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| What
is i-gold? |
| "i-gold " is a
platform which facilitates intelligent investment in gold with
an option of Physical or Demat holding of gold. |
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| Features
of i-gold |
- Transparent pricing.
- Assured quality & purity
- Option of Demating
- No risk of storage
- Simple process
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| Advantages
to an Investor |
- An ideal platform for systematic investment
in gold.
- Transparent screen based price at par
with the prevailing spot price.
- Options of loan against Demat gold
from Banks/Financial Institutions.
- Convenience of buying gold at the investors
discretion - without visiting the outlet unlike today
- Assured Quality & Purity 24 k,995 &
999 fineness gold bars imported from LBMA approved overseas
suppliers
- Delivery at 4 locations Ahmedabad,
Delhi, Kolkata & Mumbai
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| Advantages
to a Jeweller |
- A platform to trade in physical gold
with shorter & 100% guaranteed delivery cycle vis a
vis futures market.
- Transparent screen based price at par
with the prevailing spot price.
- Efficient distribution system (from
the custodian to the end user)
- Assured Quality & Purity - 24 k,
995 & 999 fineness gold bars LBMA approved
- Seamless platform (buying & selling)
for transaction
- Easily accessible through an existing
stock broker who is a member of MCX
- Delivery at 4 locations Ahmedabad,
Delhi, Kolkata & Mumbai
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| Requisites
for buying i-gold |
- Commodity Demat account with NSDL/CDSL
- Account with a member broker of MCX
- Bank account with any one clearing banks
of MCX
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| How
does it work? |
Day 1-6
- Buy /sell depending on margin money with the broker/exchange
based on Mark To Market (MTM)
Day 7 -
Intimate the status of their respective open position to Buyers
& Sellers
Day 8 - Seller members MUST
deposit the physical gold in the Group 4 vault / Deliver through
Demat form.
Day9 - Pay-in of funds by
Buyer members against their delivery commitments (obligation).
Day 9 - Pay-out of commodity |
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Physical delivery of gold (Docs: Authorisation form filled
and signed along with the photograph of the investor/authorized
person of the broker, proof of identity. (photo id card)
Demat and hold in demat account (Docs:
Commodity Deposit Form CDF and Original Allocation Letter)
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| Costs Structure |
Brokerage
(Buy/sell) |
0.50 - 1.00% of transaction
value |
Service
Tax on brokerage |
12.24%
on brokerage |
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Demat & Remat
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Rs.100/-
200/-per transaction |
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Custody & Insurance |
Rs.7,200
p.a. per (1k.g) |
VAT |
1%
of transaction value |
Sales
Tax agency charge |
0.50%
- 1.00% (required for selling physical gold) |
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| Tax Treatment |
Wealth
Tax
- Investment upto Rs.15 lacs during a
financial year is exempted
- Investment > Rs.15 lacs will attract
1% of the value of assets (including gold) as on 31st March
of every year.
Capital gains tax
- Short term if bought and sold within
36 months at the applicable tax rate
- Long term if sold after 36 months at
the applicable tax rate
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Tax calculation:
Cost Inflation Index- 1995-96 Index/1985-86 Index
281/133= 2.11278
Index cost = Buying cost* Cost inflation index
50,000*2.11278= 1,05,639
Long Term capital gain – Selling Price – Indexed
cost
1,50,000 – 1,05,639= 44,361.
On this amount (44,361) a 20% capital gain tax is levied
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| Contact
Details |
| For further Information,
contact the nearest member broker of MCX. |
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