Gold vs Equity Calculator

Over 20+ years, Indian equities (Nifty 50) have delivered 12-14% CAGR while gold has delivered 10-11% CAGR in INR terms. However, gold outperforms during global crises, high-inflation periods, and rupee depreciation. Equity wins in long secular bull markets. A balanced portfolio with 10-15% gold allocation historically delivers better risk-adjusted returns than 100% equity.

SGBs offer 2.5% annual interest on top of gold price appreciation, and capital gains are completely tax-free if held to maturity (8 years). Index funds tracking Nifty 50 have delivered ~12% CAGR but LTCG above ₹1.25 lakh is taxed at 12.5%. For gold exposure, SGBs are the most tax-efficient option. For wealth creation over 10+ years, index funds still have a higher expected return. Ideally, hold both — SGBs for stability and index funds for growth.

Physical gold and gold ETFs/mutual funds: LTCG (held >24 months) taxed at 12.5% without indexation. STCG taxed at your income tax slab rate. Sovereign Gold Bonds: completely tax-free on capital gains if held to maturity (8 years); interest taxed at slab rate. Equity (shares/equity MFs): LTCG (held >12 months) above ₹1.25 lakh taxed at 12.5%. STCG taxed at 20%. SGBs have the best tax treatment among all gold and equity instruments.

Most financial advisors recommend 10-15% gold allocation for Indian investors. Conservative investors (age 50+) may go up to 20-25%. Young investors with 15+ year horizons should keep gold at 5-10% and allocate more to equity. Gold acts as a portfolio hedge — it tends to rise when equities fall (negative correlation during crises). During 2008 and 2020 crashes, gold rose 25-30% while Nifty fell 50%+ and 35% respectively.

Yes, gold has consistently beaten Indian CPI inflation over long periods. From 2000-2025, gold delivered ~11% CAGR in INR while average CPI inflation was 5-6%. Gold benefits from rupee depreciation — even when international gold prices are flat, INR gold prices rise as the rupee weakens. However, in short 3-5 year windows, gold can underperform inflation (e.g., 2013-2018). For reliable inflation hedging, hold gold for 7+ years.