The third tranches of the gold bonds scheme for this financial year (2020-21) opened for subscription from 8-12 June. The Reserve Bank of India has fixed the issue cost at ₹4,677 per gram for gold on behalf of the government of India. Those utilizing online payments or using digital mode will get a rebate of ₹50 per gram. For these investors, the issue cost of a gold bond will be ₹4,627 per gram.
Sovereign gold bonds scheme was launched in 2015 by RBI to lessen the demand for physical gold and shift a portion of domestic savings which is utilized for buying gold can be kept as financial saving in the form of gold bonds.
The legislature fixes the cost of issuance of SGB dependent on the basic normal closing cost for gold of the last three business days of the week continuing the subscription time frame. Such prices of gold are issued by the India Bullion and Jewelers Association (IBJA).
Dissimilar to other interest in paper-gold, for example, gold ETF, in SGB, the investors get 2.5 percent interest on the investments done. Such premium is likewise relevant to investors who purchase SGBs from the secondary market. Further, this interest is taxable but continues on maturity are tax-exempt in the hands of the investor.
The global economic conditions and the falling loan interest rate, by and large, make the cost of the gold progress higher. Investors may think to invest around 10 percent of their portfolio in gold ideally via gold ETF and SGBs.
Here are key things to understand about the Sovereign Gold Bond Scheme 2020-21 Series III:
1) The issuance date of this tranches of gold bonds scheme has been set on June 16.
2) Bonds are now tradable on the stock market within a fortnight of the approved date, as per liquidity.
3) The issue cost of sovereign gold bonds is fixed dependent on the ongoing closing cost of gold as distributed by the India Bullion and Jewelers Association Ltd for gold. One gram gold is the base allowable investment in gold bonds.
4) In April, RBI had declared that the legislature will give Sovereign Gold Bonds in six tranches till September. Here are the subtleties of different tranches of gold bonds that will be issued until September:
2020-21 Series IV July 06-10, 2020 July 14, 2020
2020-21 Series V August 03-07, 2020 August 11, 2020
2020-21 Series VI Aug.31-Sept.04, 2020 September 08, 2020
5) Gold bonds have a maturity time of eight years however investors will have the choice to exit after the five years.
6) Gold bonds provide a yearly interest rate of 2.50% to investors. The gold bond’s interest will be added to the subscriber’s pay and taxed respectively.
7) Capital gains after maturity will be tax-exempted. This is a selective advantage accessible on gold bonds. Physical gold or different types of investments like gold MF or gold ETF don’t fit the bill for this benefit.
As per the Mint, the government had raised ₹1,168 crores by May issue of sovereign gold bonds. This is the highest sum activated by the government from the trade of sovereign gold bonds. The May issue, which opened for subscription on 11 May and ended on 15 May, was valued at ₹4,590 per unit.
Article Credit: NDTV/ The Mint/ Financial ExpressShare this to your,