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The Hidden GST Layer in Digital Gold Pricing
GST applies during physical redemption, subtly increasing effective acquisition cost compared to purely financial gold instruments.
Every digital gold purchase attracts 3% GST upfront. If you invest ₹1,000, only ₹970.87 converts into gold value, while the remainder goes toward tax. This reduces your effective investment base from day one. For small, recurring purchases, the cumulative tax drag can meaningfully impact breakeven timing. Investors must factor this into expected return calculations, especially when holding periods are short.