The Sovereign Gold Bond Scheme 2021-22 – Series II – In terms of GoI notification F.No.4(5)-B(W&M)/2021 and RBI press release dated May 12, 2021, the Sovereign Gold Bond Scheme 2021-22 – Series II will be open for subscription for the period from May 24, 2021 to May 28, 2021. 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. May 19, May 20 and May 21, 2021 works out to ₹4,842/- (Rupees Four thousand eight hundred and forty-two 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. For such investors, the issue price of Gold Bond will be ₹4,792/- (Rupees Four thousand seven hundred and ninety-two only) per gram of gold.
Further, 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 Scheme 2021-22 – Series II
- The bonds will be sold to 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 is applicable only to the first applicant.
- Initially, the bond will be issued for the default period of 8 years. Exit option is available from 5th, 6th and 7th year.
- 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.