Government-Run Gold Bond Scheme Opens On Monday. Here’s All You Need To Know

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The curiosity on gold bonds is taxable

A second instalment of the government-run Sovereign Gold Bond (SGB) scheme will open for subscription from Monday, May 11. The Sovereign Gold Bonds – issued by the Reserve Bank of India (RBI) on behalf of the federal government – are a part of the central authorities’s market-borrowing programme. The present collection of government-run gold bonds – the Sovereign Gold Bond 2020-21 scheme – comes at a time when the speedy unfold of the lethal coronavirus (COVID-19) has rattled the monetary markets across the globe, however elevated the enchantment of the yellow steel as a safe-haven.

Here’s all it’s worthwhile to know in regards to the Sovereign Gold Bonds 2020-21 scheme:

  1. The Sovereign Gold Bonds (SGBs) are government-run bonds – issued by the RBI – denominated in multiples of 1 gram of gold. (Also Read: Physical Gold, Gold ETFs Or Gold Bonds: How To Approach Gold?)

  2. How To Invest: The SGBs are offered by business banks, the Stock Holding Corporation, designated submit workplaces, and inventory exchanges BSE and NSE. The bonds are held in RBI books or in demat type.

  3. Who Can Buy Gold Bonds: Resident people, Hindu Undivided Families (HUFs), trusts, universities and charitable establishments can put money into the SGB scheme.

  4. Interest Rate: A hard and fast fee of two.50 per cent every year is relevant on the SGBs, payable semi-annually.

  5. Gold Bond Lock-In: The gold bond scheme comes with a tenor of eight years, with an exit choice after the fifth 12 months. The choice might be exercised on curiosity fee dates.

  6. Investment Limit: A minimal of 1 gram and a most of 4 kilograms of gold might be acquired by eligible people and HUFs in a monetary 12 months. Trusts and related entities can buy as much as 20 kilograms in a monetary 12 months.

  7. Issue/Redemption Price: The value is set on the premise of a easy common of the closing value 999-purity gold printed by the Mumbai-based India Bullion and Jewellers Association (IBJA) for the final three working days of the week previous subscription. Online subscribers paying by the digital mode get a reduction of Rs 50 on each gram of gold. The identical technique is used for figuring out the redemption value.

  8. Tax Implication: The curiosity on gold bonds is taxable. However, the capital positive aspects arising out of redemption are exempted for particular person traders.

  9. In late March, gold futures soared to an all-time excessive of Rs 47,327 per 10 grams, because the coronavirus pandemic boosted the yellow steel’s enchantment as a protected haven. Typically, gold is considered as a security guess, sharing an inverse relation with asset courses resembling equities, say wealth planners.

  10. Important Dates: The second tranche of the scheme will stay open from May 11 to 15, and the subsequent instalment will open on June 8. The gold bond scheme opens six occasions a 12 months.

TrancheDate of SubscriptionDate of Issuance
2020-21 Series IApril 20-24, 2020April 28, 2020
2020-21 Series IIMay 11-15, 2020May 19, 2020
2020-21 Series IIIJune 8-12, 2020June 16, 2020
2020-21 Series IVJuly 6-10, 2020July 14, 2020
2020-21 Series VAugust 3-7, 2020August 11, 2020
2020-21 Series VIAugust 31-September 4, 2020September 8, 2020
(Source: Ministry of Finance)

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