Sovereign Gold Bond (SGB) will open for subscription for five days, starting Monday, June 19. SGBs, a way of investing in non-physical gold, are government-guaranteed gold bonds whose price is kind to the market rate. Gold bonds under the Sovereign Gold Bond scheme are issued by the RBI on behalf of Government of India.
The 2023-24 Series I gold bonds will be issued on June 27, 2023, according to an official statement. The current series will be followed by a second tranche in September.
Here are key things to know about the Sovereign Gold Bond scheme, including the gold bond price, important dates, discount and income tax implications:
Gold bond price
The current series will be available at Rs 5,926 per unit. Each unit of the gold bond scheme is equivalent to one gram of gold.
How is the SGB price calculated?
The price of the bonds is calculated by taking a simple average of the closing price of gold (999 purity) published by industry body India Bullion and Jewellers Association (IBJA) for the last three working days of the week preceding the subscription period. Read more on how SGB rate is calculated
Important dates
The gold bonds will be available for subscription for five days, from Monday, June 19 to Friday, June 23.
Discount
A discount of Rs 50 per unit is applicable for those investing in gold bonds through digital modes. Therefore, the price after the discount will be Rs 5,876 per unit.
Lock-in period
Sovereign gold bonds come with a maturity period of eight years, with a premature exit option available only after the first five years.
Why buy gold bonds?
In addition to market-linked returns on the precious metal, the government-backed gold bond scheme also yields interest at the rate of 2.5 per cent per annum, payable on a semi-annual basis.
Who can buy gold bonds?
Resident individuals, Hindu undivided families (HUFs), trusts, universities and charitable institutions can invest in the scheme.
Investment limit: Minimum & maximum
Investors can buy a minimum of one unit of the gold bonds. A maximum limit is placed at four kilograms (4,000 units) per financial year for individual investors as well as HUFs, and 20 kilograms (20,000 units) for trusts and other such entities.
Where to buy gold bonds?
The bonds are available at commercial banks (except small finance banks, payment banks and regional rural banks), the Stock Holding Corporation of India, the Clearing Corporation of India, designated post offices, and stock exchanges NSE and BSE.
Income tax
The interest earned through the scheme is taxable but eligible for indexation benefits. The capital gains arising from the redemption of gold bonds are exempted from the capital gains tax provided the investment is held till maturity.
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