Why in News?
Electronic Gold Receipts (EGRs) are in the news because National Stock Exchange (NSE) has recently launched an EGR trading segment (from 4 May 2026), marking a major step towards formalising and digitising India’s huge but largely unorganised gold market.
Core Mechanism
- Direct Ownership: An EGR is an electronic receipt issued against physical gold deposited in SEBI-accredited vaults.
- Three-Tranche Lifecycle:
- Creation: Physical gold is deposited with a Vault Manager and converted to electronic form.
- Trading: The EGR is traded on stock exchanges (BSE/NSE) like any regular stock.
- Redemption: Investors can surrender the EGR to take physical delivery of the gold.
Trading Details
- Demat Form: EGRs are held in your existing demat account.
- Denominations: Trading is allowed in small units, such as 1 gram, making it accessible to retail investors.
- Purity Standards: Gold must meet LBMA Good Delivery or India Good Delivery standards.
- Perpetual Validity: Unlike some derivatives, EGRs have no expiry and can be held indefinitely.
Taxation & Benefits
- GST Advantage: No GST is charged when buying or selling EGRs on the exchange. A 3% GST is only levied if and when you convert the receipt back into physical gold.
- Capital Gains: If held for more than 3 years, they attract 20% Long Term Capital Gains (LTCG) tax with indexation benefits.
- Zero Storage Risk: Since the gold is in a regulated vault, investors avoid locker costs and the risk of theft or purity fraud.
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