Sovereign Gold Bonds Govt to Issue 2 Series Subscription Dates Rates and More
Sovereign Gold Bonds Govt to Issue 2 Series  Subscription Dates Rates and More

The government has announced the release of two sets of sovereign gold bonds (SGBs) in the upcoming months. The subscription window for Series III for the fiscal year 2023-24 is set from today, December 18th to 22nd, 2023. Following this, Series IV will be open for subscription from February 12th to 16th. These bonds are issued by the Reserve Bank on behalf of the Government of India.

Here's what you need to know before considering an investment in these series of SGBs:

How to Buy: These SGBs will be available for purchase through Scheduled Commercial banks (excluding Small Finance Banks, Payment Banks, and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognized stock exchanges such as the National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Eligible Buyers: The sale of SGBs will be restricted to resident individuals, Hindu Undivided Families (HUFs), Trusts, Universities, and Charitable Institutions.

Denomination: The SGBs will be issued in multiples of grams of gold, with a base unit of one gram.

Duration and Redemption: The tenure of these bonds will be eight years, with an option for premature redemption after the 5th year on the interest payment date.

Subscription Limits: Individuals can subscribe to a maximum of 4 Kg, HUFs up to 4 Kg, and trusts and similar entities up to 20 Kg per fiscal year (April-March), as notified by the Government. Investors need to declare their holdings at the time of application, which includes subscriptions from different tranches and those obtained from the secondary market within the fiscal year.

Pricing: The price of SGBs will be determined in Indian Rupees based on the average closing price of gold (999 purity) declared by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days before the subscription period. Investors subscribing online and using digital payment modes will enjoy a discounted price of ₹50 per gram.

Certificate of Holding: Investors will receive a Certificate of Holding for their purchased SGBs, and these bonds can be converted into demat form.

Interest Rate: Investors will earn a fixed interest rate of 2.50 percent per annum, paid semi-annually on the nominal value.

Taxation: The interest earned on SGBs will be taxable as per the Income Tax Act, 1961. However, individual investors will enjoy an exemption from capital gains tax upon redemption. Additionally, long-term capital gains from the transfer of SGBs will be eligible for indexation benefits.

KYC Requirements: KYC norms for purchasing these bonds will align with those for physical gold purchases. Necessary documents such as Voter ID, Aadhaar card/PAN, TAN/Passport, and the 'PAN Number' issued by the Income Tax Department are mandatory for every application.

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