SGB Issue Price – The Reserve Bank of India announced that, the Sovereign Gold Bond Scheme 2023-24 – Series III will be open for subscription during December 18–22, 2023. The nominal value of the bond based on the simple average of closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three working days of the week preceding the subscription period, i.e. December 13, December 14, and December 15, 2023 works out to ₹6,199/- (Rupees Six thousand one hundred and ninety nine only) per gram of gold.
Further, Government of India, in consultation with the Reserve Bank, has decided to offer a discount of ₹50/- per gram less than the nominal value to those investors applying online and making the payment against the application through digital mode. For such investors, the issue price of Gold Bond will be ₹6,149/- (Rupees Six thousand one hundred and forty nine only) per gram of gold.
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.
Key Points about Sovereign Gold Bond (SGB)
- Resident Indian Individuals (Singly or Jointly), HUFs, Trusts, Universities and Charitable Institutions can invest in SGB.
- The minimum permissible investment is 1 gram of gold.
- The maximum limit is 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. It also have an exit option in 5th, 6th and 7th year, to be exercised on the interest payment dates.
- Investors can earn an additional 2.50% interest per annum on the invested amount during the tenure. Interest shall be payable semi-annually.
- 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 are tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
- SGBs are also tradable in Stock Exchange (Units in Demat form), subject to series specific liquidity and price.
- You can also use SGBs as a collaterals for loans.