Investing in gold has always been a popular choice in India, but with the launch of the Sovereign Gold Bond (SGB) scheme by the Government of India, the process has become even more attractive.
As we look forward to the upcoming issues of Sovereign Gold Bonds, here's everything you need to know.
What Are Sovereign Gold Bonds?
Sovereign Gold Bonds are government securities denominated in grams of gold. They serve as a viable alternative to holding physical gold. Investors in these bonds can earn interest and also benefit from the price appreciation of gold.
Sovereign Gold Bond Calculator
Why Choose Sovereign Gold Bonds?
- Safety and Security: Unlike physical gold, SGBs are secure and free from issues like theft or impurity.
- Interest Income: Investors receive a fixed interest rate of 2.5% per annum, payable semi-annually.
- Capital Appreciation: Investors benefit from the increase in gold prices over time.
- Tax Benefits: No TDS is applicable on interest payments. Capital gains tax arising on redemption of SGB to an individual is exempted.
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| Sovereign Gold Bond Upcoming Issues |
Upcoming Issues of Sovereign Gold Bonds
The Reserve Bank of India (RBI) issues Sovereign Gold Bonds in different tranches throughout the financial year. Here are the details for the upcoming issues:
Tranche Timelines and Subscription Dates
- Tranche I: Subscription window open from August 1 to August 5, 2024.
- Tranche II: Subscription window open from October 10 to October 14, 2024.
- Tranche III: Subscription window open from December 11 to December 15, 2024.
- Tranche IV: Subscription window open from February 5 to February 9, 2025.
Investors can apply for these bonds through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognized stock exchanges like NSE and BSE.
How to Apply for Sovereign Gold Bonds
- Through Banks and Post Offices: Most nationalized banks and designated post offices accept applications for SGBs.
- Online: Applications can also be made online through the websites of scheduled commercial banks. An online discount of ₹50 per gram is provided.
Key Features of Sovereign Gold Bonds
- Denomination: Bonds are issued in denominations of one gram of gold and in multiples thereof.
- Tenure: The tenure of the bond is eight years with an exit option from the 5th year onwards.
- Interest Rate: Fixed rate of 2.5% per annum, payable semi-annually.
- Redemption: The redemption price is based on the previous week's simple average of closing price of gold of 999 purity.
Benefits of Investing in Sovereign Gold Bonds
- Hassle-Free: No need to worry about storage and security risks associated with physical gold.
- Additional Income: Earn regular interest apart from the potential price appreciation of gold.
- Tradability: SGBs are tradable on stock exchanges within a fortnight of issuance, offering liquidity.
- Loan Facility: SGBs can be used as collateral for loans, making them a versatile investment option.
In conclusion, Sovereign Gold Bonds offer a unique blend of safety, convenience, and potential for returns, making them an ideal investment for those looking to invest in gold. With the upcoming issues scheduled throughout the year, now is a great time to plan your investments in SGBs.
FAQ
What is the minimum investment in Sovereign Gold Bonds?
The minimum investment is one gram of gold.
Can NRIs invest in Sovereign Gold Bonds?
No, NRIs are not eligible to invest in SGBs.
Is there a maximum limit on the investment?
Yes, the maximum limit is 4 kg for individuals and Hindu Undivided Families (HUF) and 20 kg for trusts and similar entities per fiscal year.
How is the interest on SGBs taxed?
The interest on SGBs is taxable under 'Income from Other Sources'.
What happens upon maturity of the bond?
On maturity, the proceeds will be credited to the bank account of the investor.