Sovereign Gold Bond Scheme – The Reserve Bank of India has released the dates for the Sovereign Gold Bond Scheme SGB’s 2024-25 first subscription tranche. The first series of the SGB programme will begin on 19th June and end on 23rd June, according to the notification. The issue price has not yet been made public. This year’s SGB scheme’s first series was launched from June 20 to June 24.
Sovereign Gold Bond Scheme 2024
Government securities called Sovereign Gold Bonds, which the RBI issues, serve as a stand-in for actual gold. These SGBs are issued numerous times a year and are valued in grammes. The issue price for each series is controlled by the top financial institution. A secondary market or during the series are both options for buying and selling. Click to know more details about buying and selling on “GeM Portal”
Latest Update – First tranche of India’s Sovereign Gold Bond Scheme 2024–24 will begin trading on June 19.
In the first half of the current fiscal year, the government has chosen to issue two tranches of sovereign gold bonds (SGBs). The Reserve Bank of India (RBI) said in a statement that the subscription period for the 2023–24 Series I will be from June 19–23, 2023, and the Series II will be from September 11–15, 2023. Series I’s issuance date is June 17, while Series II’s issue date is September 20.
The SGBs will be sold through designated post offices, recognised stock exchanges, such as the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited, as well as Scheduled Commercial banks (aside from Small Finance Banks, Payment Banks, and Regional Rural Banks).
Sovereign Gold Bond Scheme: Issue Price Fixed
The Reserve Bank of India (RBI) announced on Friday that the issue price for the next portion of the Sovereign Gold Bond Scheme 2024 -22 will be Rs 5,197 per gramme of gold. This tranche will be available for subscription for five days starting on Monday. From August 22 to August 26, 2022, people will be able to sign up for the Sovereign Gold Bond Scheme 2024 Series II. As per RBi, for these investors who sign up online, the price of a gold bond will be Rs 5,147 per gramme of gold for them, which will be a discount of Rs 50 per gramme of gold.
RBI Bonds New Updations
Bonds are given out by the RBI on behalf of the Center. The bonds will be sold through banks, the Stock Holding Corporation of India Limited (SHCIL), certain post offices, and the NSE and BSE, which are well-known stock exchanges. The programme started in November 2015 with the goal of reducing the demand for physical gold and moving some of the domestic savings that were being used to buy gold into financial savings. The bond price is established in Indian rupees based on the India Bullion and Jewellers Association Limited’s report of the simple average closing price of 999-purity gold for the past three working days preceding the subscription period. The term of the bond will be for a period of 8 years. Individuals are allowed a maximum subscription of 4 KG, whereas HUFs are allowed 4 KG, and trusts and other similar institutions are allowed 20 KG every fiscal year.
Can anyone invest in Sovereign Gold Bond Scheme?
Trusts, educational institutions, charitable trusts, and Hindu Undivided Families are among the investors that are eligible to invest in the SGB tranche (HUFs). Also qualified to invest is a resident of India as specified by the Foreign Exchange Management Act of 1999. The person can hold SGBs till early maturity in the event that their residence changes to somewhere else in the world.
Sovereign Gold Bond Scheme 2024 Series I Details
The bond’s nominal value is determined by the simple average closing price for 999-purity gold on the final three business days of the week prior to the subscription period, or June 15, June 16, and June 17, 2022, as reported by the India Bullion and Jewellers Association Ltd (IBJA).
The Government of India has decided, after consulting with the Reserve Bank of India, to give investors who apply online and pay for their application through a digital channel a discount of 50/- per gramme less than the nominal value. Such investors will pay Rs. 5,041/- (Rupees Five Thousand and Forty-One only) for each unit of a Gold Bond.
Sovereign Gold Bond Scheme Denomination
The SGBs will be measured in multiples of grammes of gold, with one gramme serving as the base unit.
What is the Tenor of SBG
The SGB will have an eight-year term with an early redemption option available following the fifth year on the interest due date.
Minimum Investment Size
One gramme of gold will be the minimum investment that is permitted.
Maximum Investment Limit
According to the government’s periodically updated regulations, each person may subscribe up to 4 kilogrammes, HUFs up to 4 kg, and trusts and other similar organisations up to 20 kg per fiscal year (April-March). A self-declaration to this effect will be received. SGBs purchased on the secondary market and those subscribed to under various tranches will be included in the annual ceiling.
Sovereign Gold Bond Scheme Benefits
SGBs are quite advantageous, which makes for a very profitable purchase. Since the investor has no need to physically retain or store the gold, both the storage and security issues are eliminated. Additionally, the investor receives their money back at the current gold market rate. As a result, the investor has more control over the timing and price of gold redemption.
Joint Holder
The 4 KG investment restriction only applies to the initial application in a joint holding scenario.
What is the SGB Issue Price?
As stated by the India Bullion and Jewellers Association Limited, the price of SGB shall be set in Indian Rupees using a simple average of the last three working days of the week before to the subscription period (IBJA). The issuance price of the SGBs would be reduced by Rs. 50 per gramme for investors who subscribe online and pay digitally.
Redemption Cost for SGB
Based on a straightforward average of gold 999 pure closing prices provided by IBJA Ltd over the previous three working days, the redemption price will be expressed in Indian Rupees.
Where to Purchase Sovereign Gold Bonds
Commercial banks, the Stock Holding Corporation of India Limited (SHCIL), the Clearing Corporation of India Limited (CCIL), designated post offices (as may be announced), and recognised stock exchanges, namely the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited, will all be used to sell SGBs either directly or through agents.
Sovereign Gold Bond Scheme Interest Rate
The nominal value will be paid to investors at a fixed rate of 2.50 per cent annually, payable every other year.
SGB as Collateral
The SGBs may be used as loan security. It is necessary to fix the loan-to-value (LTV) ratio at the same level as the Reserve Bank’s standard gold loan.
Documents for KYC
The same know-your-customer (KYC) guidelines as for buying physical gold will apply. Voter identification, an Aadhaar card, a PAN card, a TAN card, a passport, and other KYC documents would be needed. Every application must be accompanied with the “PAN Number” that the Income Tax Department issues to individuals and other companies.
Tax treatment for SGB
According to the requirements of the Income Tax Act of 1961, interest on SGBs is taxable (43 of 1961). The capital gains that result from an individual’s redemption of SGB are not subject to tax.
The transfer of the SGB will result in long-term capital gains that are eligible for indexation benefits.
Sovereign Gold Bond Scheme Eligibility
The Sovereign Gold Bond Scheme requires that participants meet the following straightforward qualifying requirements.
Indian resident – The Foreign Exchange Management Act of 1999 established the eligibility requirements, and this programme is exclusively available to Indian residents.
Individuals/groups – As long as they are Indian residents, individuals, associations, trusts, HUFs, etc. are all eligible to invest in this scheme. One may invest in bonds jointly with other qualifying participants under the scheme.
Minors – Parents or guardians may acquire this bond on behalf of minors.
FAQ’s
How much may I invest, in minimum and maximum amounts? The minimal amount of gold required to issue a sovereign gold bond is one gramme. Depending on the investor, there are different upper limits. The weight restriction for organisations like trusts and universities is 20 kilos.This restriction is set at 4 kg for people and HUFs. How to pay using SGB. Demand drafts, checks, electronic banking, and cash (up to a maximum of Rs. 20,000) are all acceptable payment methods for SGBs. What Is the Scheme’s Bond Period? The bond has a total tenor of eight years. After the fifth year, but not before, investors have the opportunity to leave the bond. Is Trade allowed for SGB? The SGBs will be allowed to trade.