The SGB Issue Price – The Reserve Bank of India announced that, the Sovereign Gold Bond Scheme 2021-22 – Series IX will be open for subscription for the period from January 10, 2022 – January 14, 2022. The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period, i.e. January 05, January 06 and January 07, 2022 works out to ₹4,786/- (Rupees Four thousand seven hundred and eighty-six only) per gram of gold.
Further, Government of India, in consultation with the Reserve Bank of India, has decided to offer a discount of ₹50/- per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. Further, the issue price of Gold Bond will be ₹4,736/- (Rupees Four thousand seven hundred and thirty-six only) per gram of gold for such investors who invest through online mode.
Also, the scheme offers benefits of 2.5% interest and exemption on capital gains tax on redemption. The government initially launched the sovereign gold bond scheme in November 2015.
Eligibility and Benefits of Sovereign Gold Bond (SGB)
- The bonds can be bought by resident Indian Individuals (Singly or Jointly), HUFs, Trusts, Universities and Charitable Institutions.
- The minimum permissible investment will be 1 gram of gold.
- The maximum limit of subscribed shall be 4 kg for an individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal year (April – March) notified by the Government from time to time.
- The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchase from the secondary market.
- In case of joint holding, the investment limit of 4 kg will be applied to the first applicant only.
- The tenor of the bond will be for a period of 8 years with an exit option in 5th, 6th and 7th year, to be exercised on the interest payment dates.
- Investors will be compensated at a fixed rate of 2.50% per annum payable semi-annually on the nominal value.
- It is mandatory for investors to provide bank account details to facilitate payment of interest / maturity value.
- The interest on gold bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long-term capital gains arising to any person on the transfer of bond.
- Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.