Beginner guide · 4-minute read
Digital gold, explained simply
Digital gold lets you buy gold in small amounts through an app, while a company stores it in a vault for you. It's simple, but it isn't regulated by SEBI or RBI, and it costs more than other ways of owning gold.
Checked on 15 Oct 2026 against RBI's gold price data (Handbook of Statistics, Jul 2026), SEBI's digital gold caution (Nov 2025) and the 2026 SGB tax change.
In one minute
- Who runs it
- Private companies, such as gold refiners, selling through apps. Not SEBI or RBI.
- What it earns
- Nothing fixed: it follows the gold price, after costs.
- Costs
- 3% GST on every purchase, and a buy-sell spread of about 2–5%.
- Tax
- 12.5% on gains after 2 years; your slab rate before that. No ₹1.25 lakh exemption.
How it works, with real numbers
Spend ₹1,00,000 and about ₹97,087 of it buys gold; the rest is 3% GST. Sell straight away with a 3% spread and you'd get back about ₹94,175, so gold has to rise about 6.2% just to break even.
Over 3 years at 9.7% a year you'd keep about ₹1,21,162 after tax, against ₹1,25,287 in a gold fund with the same gold price. Over 10 years the one-off costs weigh less than a fund's yearly fee: ₹2,19,785 against ₹2,16,653.
Try the gold calculatorHow the gold price has moved
Gold averaged ₹1,18,421 per 10 grams in 2025-26, about 17 times its 2005-06 average. Over every 10-year stretch of the last 20 years it grew between 5.7% and 16.1% a year.
- Gold pays no interest, so you gain only when its price rises, and it has had long flat spells: after 2012-13, the yearly average didn't beat that level again until 2018-19.
- The range used here, 7.6% to 12.4% a year (middle 9.7%), is the middle half of those 10-year outcomes, before costs and tax.
- These are yearly averages, so short spikes and dips are smoothed out. RBI notes that prices up to 1999-2000 and from 2000-01 come from different sources, so they may not be strictly comparable.
See how the range is worked out
| 10 years | Grew a year |
|---|---|
| 2005-06 to 2015-16 | 14.4% |
| 2006-07 to 2016-17 | 12.4% |
| 2007-08 to 2017-18 | 11.4% |
| 2008-09 to 2018-19 | 9.2% |
| 2009-10 to 2019-20 | 8.9% |
| 2010-11 to 2020-21 | 9.7% |
| 2011-12 to 2021-22 | 6.4% |
| 2012-13 to 2022-23 | 5.7% |
| 2013-14 to 2023-24 | 7.6% |
| 2014-15 to 2024-25 | 10.7% |
| 2015-16 to 2025-26 | 16.1% |
See every year's price (41)
| Year | Average price, 10 grams |
|---|---|
| 2025-26 | ₹1,18,421 |
| 2024-25 | ₹75,842 |
| 2023-24 | ₹60,624 |
| 2022-23 | ₹52,731 |
| 2021-22 | ₹47,999 |
| 2020-21 | ₹48,723 |
| 2019-20 | ₹37,018 |
| 2018-19 | ₹31,193 |
| 2017-18 | ₹29,300 |
| 2016-17 | ₹29,665 |
| 2015-16 | ₹26,534 |
| 2014-15 | ₹27,415 |
| 2013-14 | ₹29,190 |
| 2012-13 | ₹30,164 |
| 2011-12 | ₹25,722 |
| 2010-11 | ₹19,227 |
| 2009-10 | ₹15,756 |
| 2008-09 | ₹12,890 |
| 2007-08 | ₹9,996 |
| 2006-07 | ₹9,240 |
| 2005-06 | ₹6,901 |
| 2004-05 | ₹6,145 |
| 2003-04 | ₹5,719 |
| 2002-03 | ₹5,332 |
| 2001-02 | ₹4,579 |
| 2000-01 | ₹4,474 |
| 1999-00 | ₹4,394 |
| 1998-99 | ₹4,268 |
| 1997-98 | ₹4,347 |
| 1996-97 | ₹5,071 |
| 1995-96 | ₹4,958 |
| 1994-95 | ₹4,667 |
| 1993-94 | ₹4,532 |
| 1992-93 | ₹4,104 |
| 1991-92 | ₹4,298 |
| 1990-91 | ₹3,452 |
| 1989-90 | ₹3,229 |
| 1988-89 | ₹3,175 |
| 1987-88 | ₹3,082 |
| 1986-87 | ₹2,323 |
| 1985-86 | ₹2,125 |
Source: RBI Handbook of Statistics, Table 35, the yearly average gold price in Mumbai.
Pros and cons
Good things
- Very small amounts. Buy a few hundred rupees' worth at a time.
- Simple. Buy and sell in the app, any time.
- Can become coins. Some apps deliver coins or bars, for a charge.
Things to watch
- Not regulated. SEBI cautioned in November 2025 that digital gold isn't a security or a regulated commodity derivative, so its investor protection doesn't apply.
- Costly to get in and out. 3% GST on every purchase, plus the spread when you sell. Over a few years that costs more than a gold fund's fee.
- No interest. You gain only if gold's price rises.
- Taxed like physical gold. 12.5% on gains after 2 years; your slab rate before that.
Is it right for you?
Mistakes to avoid
- Not checking the spread. Compare the app's buying and selling price before you buy.
- Keeping large sums in it. Without a regulator, keep bigger amounts in gold funds or ETFs.
How to start
- Compare the buy and sell prices in the app.
- Check which company holds the gold and who the trustee is.
- Buy, and keep the invoices for tax when you sell.
Words you'll see
- Spread
- The gap between the price you buy at and the price you can sell at.
- GST
- Goods and services tax: 3% on gold purchases.
- Vault
- Where the company stores the gold it holds for you.
This guide explains how things work. It is not advice on what you should invest in. NetReturns is not SEBI-registered.