Top Gold ETFs In India | Best Gold Exchange Trade Funds To Invest In 2025

When you purchase a gold ETF, you essentially buy units representing physical gold, each equivalent to one gram of gold. The gold backing these ETFs is of high purity (99.5 percent), ensuring your investment is secure. The prices of gold ETFs are transparent and fluctuate in real-time based on the market value of gold. 

Historical performance of gold ETFs

Even at record-high prices, consumer enthusiasm for gold remains strong, particularly during the festivities. The World Gold Council stated that from July to October 2024, the Indian market saw a remarkable inflow into gold ETFs, driven by favourable price momentum and increased stock market volatility. 

In 2024, over the first 10 months, the total net influx of gold ETFs reached around ₹93 billion, a substantial rise from ₹25 billion in 2023. These valuations added 12.2 tons of gold last year, bringing the total to 54.5 tons, with 32 percent annual growth.

As we move through 2025, the demand for gold remains strong, even as prices keep increasing. According to the World Gold Council report, as of December 31, 2024, gold was the major Indian asset with higher year-on-year returns. 

Source | World Gold Council reported gold as the major investment asset in India

Recently, the Association of Mutual Funds in India (AMFI) also noted that net inflows into gold ETFs were around ₹3,751 crore-plus in January 2025, with total assets under management (AUM) reaching ₹51,839 crores-plus, a 16.24 percent increase from the previous month. This growth reflects investors’ confidence in gold ETF stocks as a reliable investment choice.

Even with the volatility and rising prices of gold, retail investors have always turned to top gold ETF stocks and other forms of gold investment for higher returns. 

Tax implications of investing in gold ETFs

Investing in top gold ETFs offers several tax advantages. One primary benefit is that the income earned from gold ETFs is classified as long-term capital gains if held for a year (12.5 percent with indexation). This is typically taxed lower than short-term gains and minimises tax liabilities.

Gold ETF stocks are exempt from various taxes that apply to physical gold, including wealth tax, Value Added Tax (VAT), and Securities Transaction Tax (STT). This means that you – as an investor – can enjoy your gains without worrying about additional tax burdens often associated with physical gold investments. Moreover, there are no entry or exit loads for gold ETFs on stock exchanges.

Safety is another key advantage—ETFs eliminate the hassles associated with physical gold, such as storage and security concerns. Furthermore, these ETFs can be used as loan collateral, adding liquidity to your investment. Overall, gold ETFs in India present a secure and tax-efficient way to invest in gold.

Frequently Asked Questions (FAQs) 

Can I convert my gold ETFs into physical gold?

Yes, depending on the provider, you can convert gold ETFs into physical gold, but only if the quantity is large enough, usually starting from 1 kg. It’s essential to check the specific ETF’s terms and conditions before converting to physical gold.

Can NRIs invest in the gold ETFs in India? 

Yes, non-resident Indians (NRIs) can invest in top gold ETFs in India using funds from their non-resident external (NRE) or non-resident ordinary (NRO) accounts. NRIs can also open a demat account on the NSE or BSE for effective trading. 

What is the difference between gold ETFs and gold mutual funds?

Gold ETFs trade like stocks on the NSE or BSE, offer intraday liquidity and are directly linked to the price of gold. On the other hand, gold mutual funds are mutual fund schemes that invest in gold ETFs. They provide diversification but have higher expense ratios.