Can I Convert Digital gold To Physical Gold? yes you can convert your digital gold into Physical gold 

Gold has been a part of human history for a long time. Before paper money, gold played a major role in the monetary systems of the older times.

Even today, it plays a big part in the global economy. People invest in many forms of gold, such as gold coins, jewelry, bars, coins, and even bricks. With rapid digitalization, you can now invest in digital gold by simply using your smartphone.

Gold is considered a safe investment and comes with ease of conversion. When you buy digital gold online, the same amount of physical gold is kept in the insured vaults on your behalf. Usually, it is 24-karat gold, the purest form of the metal. You can convert your digital gold to physical gold easily.

Some financial institutions, along with big jewelers, offer buying, selling, and conversion of digital gold. The best part is digital gold can be redeemed in the form of gold coins, bars, jewelry, etc.

Sign up with Koshex to know more about the different forms of gold investments.

What is Digital Gold?

Simply put, digital gold is gold bought online through digital channels. You only need a smartphone with Internet access and a bank account or UPI ID to buy digital gold.

It is similar to buying clothing or food online or getting a recharge done. Once the purchase is complete, the same amount of physical gold will be stored in vaults.

The provider is responsible for storing the gold on your behalf. Thus, you have gold to your name without owning it in its physical form. This eliminates the hassle of purchasing and storing physical gold.

There are no restrictions on the amount of digital gold you can buy online, and you can buy it for as low as Rs.10. You can also sell it anytime you want at the prevailing market prices.

Digital gold is also traded on stock exchanges worldwide.

Also, check- Selling Digital Gold A Step-By-Step Guide

How To Convert Digital Gold To Physical Gold?

Here’s a step-by-step guide to convert digital gold to physical gold:

1. Log in to the digital gold account on the platform from which you bought the digital gold. Some popular platforms in India include Paytm, PhonePe, Axis Bank, and MMTC-PAMP.
2. Select the option of converting digital gold into physical gold. It can be converted into gold coins, bars, or any form of your preference.
3. Input the amount of digital gold you want to convert into physical gold.
4. Check the additional making and/or minting charges applied. Review the terms and conditions of the platform. Look for other charges regarding the conversion of digital gold to physical gold.
5. Confirm delivery address and delivery charges. The physical gold can be delivered directly to your home or you can collect it from a designated location.
6. Some providers may require additional documents for verification. Ensure that you fulfill the requirements to avoid delays.
7. Pay the final amount, which will include delivery charges and/or minting charges.

If you have queries regarding conversion to physical gold, you must contact the platform’s customer support. They will guide you through the process of converting your digital gold into physical gold.

Benefits of Investing in Digital Gold

Digital gold is becoming the preferred investment option due to its many advantages. Let us look at some of the benefits of investing in digital gold.

1. Security

With digital transactions, one of the main concerns is security, and digital gold ensures safe storage. The company you buy from keeps your digital gold secured in its vaults, making it completely safe. It further cuts the cost of locker fees as well as the risk of theft.

2. Conversion to physical gold

You can convert your digital gold to physical gold anytime you want. You need a minimum of one gram of gold in your digital gold account to convert it into a physical form of gold, like gold coins, bars, etc. This physical gold can be delivered to your doorstep by paying additional delivery charges to get the gold in the physical form.

3. Quality

Buying digital gold ensures that your money is being invested in 24-carat gold, the purest form of the yellow metal. Hence, you get the value you have paid for.

4. Can invest in small amounts

Digital gold attracts young investors because there are no lower limits or rules around minimum purchases. It can be purchased for relatively small amounts of money. This also helps in creating a strong investment portfolio and a secure financial future.

5. Can be used as collateral

Given the purity of digital gold, some lenders accept digital gold as a form of collateral for loans.

Tax on Digital Gold

Digital gold is taxed at the same rate as physical gold. When you purchase digital gold, you are required to pay 3% in goods and services tax (GST).

However, the holding period plays a crucial role here. If you have kept the digital gold for less than three years, then short-term capital gains are taxable at the applicable income tax slab rates.

In case you sell digital gold after three years, then it will be considered a long-term capital gain. This will be taxed at 20.8% (including cess) with the indexation benefits.

Note that as announced in Budget 2023, capital gains tax is not levied on the conversion of physical gold to digital gold, or vice versa.

Conclusion

Gold is one of those investment options that stays strong even in times of turbulence. Thus, many people want to invest in gold. With the advent of digital gold, it has become a convenient method of investment, especially for people investing smaller amounts. Digital gold can be purchased from the comfort of your home and it is stored safely in secured vaults. Moreover, you can easily convert digital gold to physical gold, which can be delivered to you at your doorstep with some additional delivery charges.

Different platforms and providers may have different features, terms, and conditions regarding the conversion of digital gold. It is best to research the provider before you start investing. Sign up with Koshex to get guidance on digital gold investment and other related queries. You can also buy digital gold through Koshex!

Frequently Asked Questions (FAQs)

Can digital gold be converted to cash?

Yes, digital gold can be converted to money by selling it. After you sell the digital gold, an equivalent amount of money will be transferred to your bank account. Digital gold can be easily sold online any time you want.

Is there any delivery or making charges for home delivery?

The delivery and making charges can vary depending on the platform and the jeweler of your choice. It can also depend upon the amount of digital gold you have converted into physical gold.