Dhanteras is a very auspicious festival marking the beginning of Diwali. It holds deep cultural significance for both residents as well as Non-Resident Indians (NRIs). Purchasing gold is considered very auspicious on this day and is considered as a symbol of prosperity. Whilst investing in gold is the tradition during Dhanteras, there are various ways to buy Gold. In this blog, let’s find out the different kinds of gold investments in Dhanteras for NRIs in 2024.
Who is a Non-Resident Indian (NRI)?
According to Income Tax regulations, a citizen will be a resident of India in the previous year, if:
- He/she is in India for at least 182 days in that year, OR
- If the individual was not in India for at least 182 days in the previous year but he/she was in India for at least 365 days during the last 4 years to that year and at least 60 days during that year.
Case 1: If you were in India for 190 days in 2020, then you are a resident of India for 2020.
Case 2: If you were in India for 55 days in 2020, then you fail the first criteria! But you were in India during the entire time span of 2015-2019. Then you are a resident of India in spite of not being in the country for at least 182 days in 2020.
4 Ways to Invest in Gold this Dhanteras!
1. Gold Jewellery
For many NRIs, Dhanteras signifies the purchase of gold jewellery. From intricate necklaces and bracelets to timeless earrings and bangles, investing in these pieces not only adds to one’s personal collection and makes an attractive investment but also holds sentimental value, connecting to cultural roots. However, this attracts making charges, so buying too much gold jewellery without a purpose comes with additional cost.
2. Gold Coins and Bars
Gold coins or bars are a popular choice, offering both investment value and flexibility. NRIs can consider these as they are physical assets, hold intrinsic value and can be easily stored or liquidated when needed, making them a sound financial choice in addition to their cultural significance.
3. Gold ETFs and Bonds
Among modern investments, Gold Exchange-Traded Funds (ETFs) and bonds offer a convenient way to invest in gold without owning any physical gold. This approach provides exposure to gold prices and liquidity, ideal for NRIs looking for a more secured investment portfolio.
4. Gold Mutual Funds
Gold funds represent a category of mutual funds that either directly or indirectly invest in gold reserves. Typically, these investments involve gold-producing and distributing companies’ stocks, physical gold, and mining company stocks. This form of investment offers a convenient way to invest in gold without the need to own physical gold.
Gold mutual funds are open-ended investments, relying on units provided by gold ETFs. As the fundamental asset is secured in the form of physical gold, it reflects the value of actual gold.
Can NRIs invest in Sovereign Gold Bonds?
Sovereign Gold Bonds (SGBs) are financial instruments issued by the Reserve Bank of India (RBI) on behalf of the Government of India, allowing individuals to invest in gold virtually. These bonds are denominated in grams of gold and are a secure and convenient way for investors to participate in the gold market.
This is a virtual asset reflecting the price of gold, so the price of SGB is always equal to that of actual gold, so you get the benefit of an increase in the price of gold. However, this is not actual gold, and so, you cannot get actual gold in exchange of SGBs, and they can be sold off / redeemed only in cash.
Under the regulations of the Foreign Exchange Management Act (FEMA), 1999, Non-Resident Indians (NRIs) are not permitted to invest in Sovereign Gold Bonds. However, an NRI who previously invested in SGBs before attaining NRI status can retain the bonds until their maturity or request early redemption.
Conclusion
Dhanteras is a moment to connect with tradition while making sound financial decisions. Whether it’s in the form of jewellery, tangible gold or gold securities like ETFs and mutual funds, buying gold during this auspicious time reflects both cultural heritage and prudent financial planning.
May this Dhanteras bring abundance and joy, and unite all NRIs across the globe in the spirit of the festival. And if you are looking to buy virtual gold, connect with us and we will make gold buying smooth so that you can enjoy Dhanteras hassle-free!
SBNRI is an authorized Mutual Fund Distributor platform & registered with the Association of Mutual Funds in India (AMFI). ARN No. 246671. NRIs willing to invest in mutual funds in India can download the SBNRI App to choose from 2,000+ mutual fund schemes or can connect with the SBNRI wealth team to better understand Mutual Fund investments.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. SBNRI does not intend to predict future returns, please read all related documents before investing.
Frequently Asked Questions
How can NRIs buy Gold this Dhanteras from abroad?
NRIs can buy gold virtually through various digital platforms, or opt for gold-backed investments like mutual funds.
Should NRIs buy physical gold or digital gold for Dhanteras?
Physical gold, such as jewellery or coins, lets you buy the actual asset and build sentimental value, while digital gold provides ease of investment and quick purchase hassle-free. The ultimate choice is up to you since both forms of investments bring prosperity.
How can NRIs ensure the authenticity of their gold purchases made online?
It’s vital to purchase from reputable and certified sellers. Make sure to check the hallmark and purity certificates for authenticity while buying gold.
Are there tax implications when buying gold for Dhanteras as an NRI?
Tax implications might vary based on the form of gold purchased. You can connect with our NRI Tax expert and get personalised insights by clicking here.
