When thinking of gold, Dubai or the City of Gold, is the first name that comes across our minds. In India, gold is way beyond an investment option, and citizens enjoy a substantial rate of yellow metal consumption. But when it comes to purchasing gold, Dubai has always been a preferred destination amongst the citizens of India. Moreover, the exemplary gold souks of Dubai are quite famous among tourists and travellers in Dubai.
However, if you are wondering why buying gold in Dubai is beneficial, read along.
When discussing investment, businesses often seek a safer option ensuring guaranteed returns. In this regard, gold is considered a safe bet that secures investment in the long run. Moreover, Dubai, also known as a city of gold, is a core hub of trading activities. Therefore, businesses and individuals consider buying gold in Dubai to gain higher returns.
Nonetheless, go through the pros and cons of buying gold in Dubai before investing:
1. Gold quality/purity
The gold purity or quality is one of the significant reasons why individuals prefer gold investment in Dubai. A considerable portion of Indians and Pakistani people visit Dubai during festivities to buy gold since the quality and purity of gold are way better than what is available in the native countries.
Gold is not only a form of investment to them, but also a sense of sentiment is attached to it. Moreover, Dubai gold market is well-regulated and managed, which makes buying gold in Dubai much safer and better compared to other countries across the world.
When visitors and travellers visit Dubai, the difference in the price of gold rate in Dubai vs India is one of the significant factors that entice them to purchase gold. The gold price in Dubai is quite affordable due to lenient taxation and tourism when compared to other parts of the globe.
Moreover, there is no import duty applied on gold, making it affordable compared to other parts of the world. However, a significant factor to consider when estimating gold price in Dubai vs India is that a VAT of around 5% is applied on gold jewellery.
3. Scope of bargaining
Often people think that there is no scope for bargaining when purchasing gold. However, it is not true when buying gold in Dubai. Though there is no such scope for bargaining over the gold price, customers can bargain on the gold-making charges. Usually, the gold-making charges constitute around 30-50% of the price of the ornament. Due to the extensive range of variety and endless demand, customers can bargain over the making charges.
1. Poor returns on physical gold
If you are planning to sell your physical gold, then it is not at all profitable. This is because of the rate of return. It does not encompass the additional charges that you will pay while buying gold in Dubai, like the making charges.
2. No stable source of income
Most people consider the gold purchase as a future investment. However, one must not purchase gold due to this reason. Furthermore, one can purchase and sell gold only once. Moreover, it does not ensure guaranteed stable profits. Therefore, it may be a significant asset but not a great investment option for income.
3. No storage safety
Storing substantial gold is nothing but a security threat. It can’t be stored at home as it is always vulnerable to threats. Moreover, travelling with gold from Dubai to India can be risky. This is why investors or individuals must be extra cautious before buying gold in Dubai.
Usually, the rate of gold in Dubai depends on international values, ensuring consistency in pricing across all the outlets in the city. Since international gold prices differ in the same way stock markets do, gold buyers in Dubai can benefit from reducing prices and acquiring gold at the most competitive price.
In India, the Central Board of Indirect Taxes and Customs specify certain limits on how much one can buy from Dubai and import into India. Nonetheless, if you are seeking an answer to this question, saying, ‘how much gold can I buy from Dubai’ and import into India, read along.
On April 1, 2016, the Central Board of Indirect Taxes and Customs declared that any Indian traveller returning to India after a year or more could bring any gold jewellery with them. However, the amount of gold that can be imported from Dubai to India varies on the basis of the passenger’s gender. As per duty-free allowance, a male traveller can carry a maximum of 20gms, which should not cost more than Rs. 50, 000, while a female traveller can carry a maximum of 40gms which should not cost more than Rs. 1 Lakh.
Moreover, children who have stayed abroad for at least a year are eligible for duty-free gold jewellery. Note that the duty free limit is only applicable to gold jewellery. The customs duty fee applies to other kind of gold, such as gold bars, coins and the like.
Yes, gold purchased from Dubai is free of tax. This means you will have to pay no additional taxes for the purchased gold. Besides, the quality or purity is optimal compared to other countries, and the gold market is well-organised and controlled.
Yes, you can import gold in India from abroad beyond the specified limit. However, the buyers need to declare it at customs and pay the government -specified import duty of 36%.
Men passengers travelling from abroad to India can wear up to 20gms of gold, costing no more than Rs. 50, 000.
The Dubai Gold Souk is the most traditional gold market in Dubai. The price of gold from this souk is also lower compared to many other places across the world. Besides, the variety, the designs and the shine in the souk allow gold buyers to explore the magnificent craftsmanship.
Yes, the purity and quality of gold are comparatively better than what is available in other parts of the world. Moreover, the gold market in Dubai is well-managed and controlled, which makes the purchase safer and better.
Yes, it is wise to purchase gold in Dubai as it is tax-free. It means that you will only have to pay for the purchased gold and no additional taxes. Moreover, the quality is superior compared to other places in the world.
There is no specific interest rate for buying gold in Dubai as the rate keeps fluctuating on the basis of market rate and demand. Moreover, it depends on the weight of gold purchased by individuals.