How to Buy and Sell EGR: A Quick Guide

Published on June 01, 2026 | 6 min read

Key Takeaways

With EGR, you can buy and sell gold digitally and bypass the risks related to physical gold.
EGRs are traded on stock exchanges like NSE and BSE, making the trading process similar to stocks via a demat and trading account.
EGRs offer benefits such as purity assurance, transparent pricing, diversification and enhanced security.
EGRs trading comes with costs such as brokerage fees, exchange transaction fees, depository charges, and GST.

Gold has always been one of the most favoured assets in India due to its safe-heaven asset nature. However, there has been a significant shift in the purchase and sale of gold over the past few years. People have transitioned from gold coins, bars and jewellery to digital gold products such as Electronic Gold Receipts (EGRs).

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If you think you have FOMO and don't know how to buy and sell EGRs in India, then this guide is for you, where we will explore the process of buying and selling EGRs.

What are Electronic Gold Receipts?

An Electronic Gold Receipt (EGR) is a digital certificate reflecting the ownership of specific quantities of physical gold stored in secure vaults approved by SEBI. When you buy an EGR, you hold an electronic receipt in your demat account instead of holding physical gold. EGRs are backed by high-purity physical gold, which is stored in SEBI approved vaults, making them easier to trade in a standardised and transparent manner.

EGRs are primarily traded on the recognised stock exchanges in India, including: National Stock Exchange Bombay Stock Exchange

How Do EGRs Work?

The process behind EGRs is simple:

Physical gold is deposited into an approved vault.
The vault issues an electronic receipt equivalent to the gold.
Receipts are listed on the stock exchanges.
Investors buy and sell EGRs via trading platforms.

How to Buy EGRs?

An investor can buy electronic gold receipts by following the simple steps below:

Step 1: Open a Demat and trading account with a SEBI registered broker.

Step 2: Complete KYC by submitting documents such as:

PAN Card
Aadhaar Card
Bank Details

Step 3: Search for EGRs on the trading platform and check available lot sizes and prices.

Step 4: Place a buy order by entering the quantity, choosing a market order or limit order, and confirming the transaction.

Step 5: After the purchase, EGRs units are credited to your Demat account.

Also Read: Digital Gold vs Electronic Gold Receipts (EGRs): Which One is Better for You?

How to Sell EGRs?

You can follow simple steps to sell EGRs in India:

Step 1: Log in to your Demat account.

Step 2: Navigate to your holdings.

Step 3: Select the EGR units you want to sell.

Step 4: Place a sell order at your desired price.

Step 5: After execution, proceeds will be credited to your bank account post settlement.

Costs Associated with EGR Trading

It is essential that you understand the costs associated with EGR trading, as they can affect your overall returns:

Brokerage Fees: Just like share trading, your broker may charge a fee for completing buy and sell transactions.
Exchange Transaction Fees: Stock exchanges may levy a nominal charge for facilitating trades.
Depository Charges: Depositories may charge annual maintenance fees since EGRs are held in a demat account.
Good and Services Tax (GST): GST is applied on the brokerage and other service charges. However, GST is not applicable on the trading value of EGRs.

Taxation on Selling EGR

The tax treatment of EGRs depends on the holding period and prevailing tax regulations:

Short Term Capital Gains: If you sell EGRs within 12 months of purchase, any profits generated will be treated as short-term capital gains (STCG). The profit will be added to your income and taxed as per your applicable income tax slab rate.
Long Term Capital Gains: If you sell EGRs after 12 months, then the gains will be treated as long term capital gains and will be taxed at a rate of a flat 12.5%.

Advantages and Risk of EGRs

Electronic Gold Receipts come with several benefits and also carry certain risks, like any other investment product. It is important to understand both to make an informed decision.

Aspect	Advantages of EGRs	Risks of EGRs
Ownership	Provides ownership of gold in electronic form without the need to hold physical gold.	Investors do not have immediate physical possession unless the EGR is redeemed.
Purity and Quality	Backed by standardised, high-purity gold stored in accredited vaults, ensuring authenticity.	Investors rely on vault managers and exchanges to maintain quality and compliance standards.
Storage and Security	Eliminates concerns related to theft, damage, or storage of physical gold.	Although physical storage risks are minimised, investors remain exposed to operational and custodial risks.
Liquidity	Can be bought and sold on stock exchanges through a trading account, offering ease of transactions.	Trading volumes may be limited in the initial stages, potentially affecting liquidity.
Price Transparency	Exchange-based trading ensures transparent and market-driven pricing.	EGR prices can fluctuate due to changes in domestic and international gold prices.
Investment Cost	No making charges, wastage charges, or locker expenses typically associated with jewellery purchases.	Brokerage fees, transaction charges, and demat account costs may impact overall returns.
Physical Redemption	Investors may have the option to convert EGRs into physical gold, subject to prescribed conditions.	Redemption may involve additional charges, procedural requirements, or minimum quantity limits.

Electronic Gold Receipts are playing an important role in digitising commodities in the evolving digital economy. EGRs offer a modern option for investors looking for exposure to gold without dealing with physical holding, purity checks or making charges.

FAQs

What is an Electronic Gold Receipt (EGR)?

An EGR is a digital instrument that represents ownership of physical gold stored in accredited vaults.

How can I buy EGRs?

You can buy EGRs through a registered stockbroker using a demat and trading account.

Are EGRs backed by physical gold?

Yes, every EGR is backed by a corresponding quantity of physical gold held in approved vaults.

Can I convert my EGRs into physical gold?

Yes, EGRs can be redeemed for physical gold, subject to exchange and vaulting requirements.

Is investing in EGRs safer than holding physical gold?

EGRs eliminate risks such as theft, loss, and storage issues associated with physical gold.

What costs are involved in trading EGRs?

Investors may pay brokerage, transaction charges, demat fees, and applicable taxes on services.

How are EGRs taxed in India?

Capital gains taxation depends on the holding period and the prevailing tax rules at the time of sale.

Who should consider investing in EGRs?

EGRs are suitable for investors seeking a convenient, transparent, and regulated way to gain exposure to gold.

About Author

Sachin Gupta

Senior Sub-Editor

is a seasoned financial writer with over eight years of experience across global markets, including Australia, the UK, and New Zealand. He specialises in simplifying complex financial concepts, making them accessible and engaging for a wide range of readers. When he’s not writing or traveling, he can often be found exploring the mountains, drawing inspiration from the calm and clarity of the outdoors.