Gold has delivered strong returns in 2025, outshining the equity market for most of the year. With prices touching new highs, investor interest has also shifted towards digital gold — a modern way to invest in the yellow metal without physically buying or storing it. If you are planning to invest in digital gold, it is important to clearly understand how it works, its costs, and the risks involved.
Digital gold provides flexibility and accessibility. Unlike physical gold, where purchasing requires a relatively large investment amount and storage facilities, digital gold allows investors to buy even tiny fractions of gold through online platforms. Some service providers enable investments starting from just ₹10, making it a preferred option for young and small retail investors.
According to data from NPCI, digital gold transactions saw significant growth in 2025. By November alone, the number of digital gold transactions had crossed 94.05 crore, with the total value exceeding ₹12,471 crore. This surge clearly reflects rising trust and popularity among Indian consumers.
Investors can purchase digital gold through several widely used apps including Paytm, PhonePe, Google Pay, and Amazon. Leading jewellery brands such as Kalyan Jewellers, Tanishq, and Malabar Gold & Diamonds also offer the option to buy gold digitally.
When you invest, the platform buys physical gold on your behalf and stores it in insured, secure vaults. The value of your holding reflects real-time market prices. Whenever required, investors can opt to convert their digital gold holdings into physical gold, though additional charges may apply for making and delivery.
While the convenience is appealing, financial experts caution that digital gold is not a regulated investment product in India. In November this year, SEBI also issued an advisory alerting investors to be cautious. Unlike Gold ETFs and Sovereign Gold Bonds (SGBs), digital gold does not fall under SEBI regulations. Therefore, investors do not get regulatory safety or transparency protections.
Market analysts point out that platform pricing policies may also impact returns. For example, during high volatility in gold prices, platforms may widen the gap between buying and selling prices. This could result in an investor not receiving the best price while selling digital gold.
Before you begin investing, it is crucial to know the complete cost structure:
| Cost Category | How It Applies |
|---|---|
| GST | 3% GST is applicable while purchasing digital gold |
| Platform Charges / Spread | Approx. 2–3% (or more) margin between buy and sell price |
| Conversion Charges | Making charges, delivery fees and GST when converting to physical gold |
| Capital Gains Tax | Short-term or long-term tax based on holding period |
For instance, when you buy gold worth ₹10,000 digitally, you may end up paying ₹300 as GST and another ₹300 as platform spread — bringing your acquisition cost to about ₹10,600.
If you sell your digital gold within 24 months, the profit is taxed as short-term capital gain based on your income tax slab. If sold after 24 months, the gain is taxed as long-term capital gain at 12.5%.
Digital gold is a convenient, accessible, and modern investment option — especially for those who want to accumulate gold gradually. However, it is important to remember:
✔ It is not a SEBI-regulated product
✔ Fees may reduce returns
✔ Tax implications must be understood beforehand
If you are investing purely for wealth building and safety under regulatory oversight, Gold ETFs or Sovereign Gold Bonds may be better alternatives. But if your primary goal is to purchase gold digitally with flexibility and convert it later into jewellery, digital gold can be a useful option.
