India Announces New Sovereign Gold Bond Issue By Investing.com
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New Delhi – The Government of India, in collaboration with the Reserve Bank of India (RBI), has announced the issuance of two separate series of Sovereign Gold Bonds (SGBs). The Series III tranche will be offered from December 18 to December 22, 2023, with an issuance date set for December 28. Accordingly, the Series IV tranche will be open for subscription from February 12 to February 16, 2024, and will be issued on February 16, 2024. February 21st
These bonds can be purchased through some banks (except small finance banks and payment banks), Stock Holding Corporation of India (SHCIL), Clearing Corporation of India (CCIL), Post Offices and recognized stock exchanges such as National Stock Exchange. National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
SGB has a maturity period of 8 years with an option for early repayment after 5 years from the date on which interest becomes payable. Investors have the flexibility to purchase these bonds using various payment methods including cash (up to ₹20,000), draft, check or electronic banking. The price of the notes will be determined based on the average closing price of gold provided by the Indian Bullion and Jewelers Association (IBJA) prior to the subscription week. Additionally, subscribers who choose digital mode or online purchase will get a discount of ₹50 per gram.
Investors in SGB receive semi-annual interest of 2.50%, which is taxable according to current regulations. However, capital gains resulting from redemption are exempt from tax in accordance with the provisions of the Income Tax Act. Indexation benefits apply to long-term capital gains arising from a transfer.
The government has set the annual investment limit for these bonds at 4 kg for individual investors and Hindu Undivided Families (HUFs) and 20 kg for trusts and other entities. The plan is part of the Indian government’s broader strategy to provide alternative forms of investment to gold and reduce physical demand for the precious metal.
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