Kerala’s love affair with gold

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Kerala-love-gold

Kerala is well-known for its fascination with gold and gold jewelry. In the 1970s, till 2000s whenever Keralites traveled to Gulf countries they returned with large quantities of gold. Those days there were many restrictions on the import of gold and this is the reason that Malayalees bought gold when they went abroad. However, nowadays the restrictions on gold import are more relaxed and the yellow metal is more easily available within the country. Most Indians, including Malayalees, do not consider gold to be for mere ornamentation instead gold is considered a good form of investment. However, if you are considering buying gold for investment then you should consider the gold rate in Kerala at the time of buying.

Where Should you Buy Gold in Kerala?

There are a number of jewelry shops spread across the length and breadth of this South Indian state. All the major cities including Cochin, Thiruvananthapuram and Calicut have a large number of jewelry shops. Even the smaller towns are not far behind in their love for gold and you can find all sizes of shops in the smaller towns as well. The more popular shops include Malabar Gold, Gold Alukkas, Joy Alukkas etc. In fact, gold buyers are literally spoilt for choice when it comes to gold shops in this state. It is a good idea to visit some of the most popular shops in the city that you are in and then engage in some window shopping while you decide the particular shop that you wish to buy from. Make sure that this shop provides some kind of certification like BIS and Hallmark. Otherwise there are many traditional shops in each city which have been passed down from one generation to another and they are equally reliable.

What to check when buying gold in Kerala?

Before you set out to buy gold in this state, you should always check the price. Although the rates of gold will be more or less the same across the state and cities, labor charges are the real catch. Some shops charge more for the making of the ornaments, but this does not matter if you are buying gold bars or biscuits or coins. However, if you are buying ornaments then it is advisable to check the making price of different shops. At the same time, as mentioned above, you should check for purity and wherever possible only opt for hallmarked jewelry.

How gold prices are determined in Kerala?

Gold rate in Kerala largely depends on the international price of gold. Hence if the price of gold rises in the international market, it will rise in Kerala as well and vice versa. If we consider the last few years, the year 2016 has been a good year for people wanting to invest in gold in Kerala and they have got significant returns. In fact, if people in this state sell the gold bought last year in this year then they stand to gain almost 20%. If you are looking for steady returns then gold is a good investment along with being a good diversification saving instrument.

Take into consideration taxation of gold in Kerala

You definitely need to bear in mind that gold in Kerala or elsewhere in the country will be taxed. If you sell gold after three years, there will be a 20% tax with indexation. This means that if the indexation works out to be 10% over two years, your tax rate on the gold that you sell will only be 10%. If you sell gold before three years, you will be taxed according to your tax slab. Hence you will end up paying 10, 20 or 30 percent depending on your tax slab. The higher is the tax slab, the more will be the tax rate on your gold.

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