Investing in Sovereign Gold has become more beneficial, understand how you can get better returns

The Reserve Bank of India (RBI) launched Sovereign Gold in 2016. Then most of the people were confused about this new investment option.

The Reserve Bank of India (RBI) launched Sovereign Gold in 2016.

reserve Bank of India ,RBI, Sovereign Gold in 2016 (Sovereign Gold) was launched. then most people invest (Investment) Let’s get confused about this new option. But Anand of Jaipur liked this bond. He invested in 100 grams of gold through Sovereign Gold Bond ie SGB. Now on redemption of this bond, he has made a big profit. Sovereign Gold Bond is a government scheme. this physical gold (Physical Gold) It is proving to be a great option. This bond is issued by the Reserve Bank. When gold bonds were issued in January 2016, the price of one gram of bond was Rs 2,600. Then Anand had invested a total of Rs 2.60 lakh.

However, the maturity of this bond is eight years, but it can be redeemed after five years. RBI has given the option of Prematurity for the first time. For this, a price of Rs 4,813 per unit has been fixed. This price is determined by taking the average of last week’s closing price of gold. This time the average of gold prices between January 31 and February 4 has been made the basis. The facility of pre-mature encashment will be available every six months.

How much profit will there be?

Anand got Rs 4,81,300 by selling 100 grams of gold in lieu of bonds. Whereas, he had invested Rs 2.6 lakh. In this way he made a profit of Rs 2,21,300. Not only this, interest of 2.5 percent is also available on this investment annually. In return, Anand has already earned Rs 32,500.

In this way, he earned a total of Rs 2,53,800 in five years on an investment of Rs 2,60,000. That is, Anand has got a splendid profit of about 98 percent.

Understand tax math

There will be no tax on profits when SGBs are redeemed through RBI. In this way, Anand will not have to pay any tax on his earnings of 2,21,300. If this bond is sold through the exchange, then the return from it will come under the category of capital gains. If this bond is sold before three years from the date of purchase, the return will be treated as short term capital gain.

This income will be added to the investor’s annual income, which will be taxed as per the slab. If the same bond is sold after three years, then this return will come in the category of long term capital gain, which will be taxed at the rate of 20 percent. However, the interest earned every year is added to the annual income of the investor, on which he will have to pay tax based on his slab.

Tax and investment expert Balwant Jain says that sovereign gold bonds are proving to be like the price of mangoes and kernels for investors. You should definitely include this bond in your portfolio. This is a useful plan to meet the need of sleeping for children’s wedding. Nowadays, be it son or daughter, there is a need to sleep during marriage. Investing in gold bonds is a good option for this purpose.

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