Sovereign Gold Bond: Who can invest, what is the interest rate and how will it be taxed

There is a great investment opportunity in Sovereign Gold Bonds scheme (Indicative picture)

The tenure of the gold bond will be 8 years. However, the customer can redeem it after 5 years if he wants. A person has to invest at least 1 gram of gold. The maximum investment limit is 4 kg.

Sovereign Gold Bond (SGB) has been released on June 20. Common man can invest in it. In this, investment can be made by buying sovereign gold bonds, on which the government pays interest at a fixed rate. The installment of Sovereign Gold Bond for the current financial year will end on June 24. After this, Sovereign Gold Bond will be issued on June 28, 2022. The second installment will run from August 22 to August 26, 2022. There are many important things related to Sovereign Gold, about which it is important to know. We will know here that the Reserve Bank’s sovereign gold bond ,Sovereign Gold BondsWho can invest in ), what will be the interest on the gold bond and how will that interest be taxed.

Sovereign Gold Bond can be invested in Trusts, HUFs, Charitable Institutes, Universities, any citizen of India, any individual in the name of his minor child, or in joint with anyone. The nominal value of this bond is determined on the basis of simple average closing price. It is decided by the India Bullion and Jewelers Association or IBJA. In this, the simple average closing price of gold of 999 purity is determined.

Discount on Gold Bond

In consultation with the Reserve Bank, the Government of India has announced a discount of Rs 50 per gram of gold. However, this exemption is for those who will apply online in Sovereign Gold Bond. Also, payment of Sovereign Gold will have to be done digitally, only then will get the benefit of discount of Rs 50 per gram. The government has fixed the price of gold bond per unit at Rs 5,041. The gold bond will be given in the base unit of one gram. One can invest in gold bonds in multiples of 1 gram.

how much can you buy gold

The tenure of the gold bond will be 8 years. However, the customer can redeem it after 5 years if he wants. A person has to invest at least 1 gram of gold. The maximum investment limit is 4 kg. In a financial year (April to March) a HUF can invest up to 4 kg, trusts and such companies can invest up to 20 kg in gold bonds. If two people take a gold bond in the joint, then the first applicant will be given an opportunity to invest in gold up to a maximum of 4 kg.

how will the purchase

The price of the gold bond will be fixed in Rs. The gold rate for the last three days of the week in which the gold bond subscription starts is calculated. It is announced by IBJA. Investors who invest digitally in gold bonds will be given a discount of Rs 50 per gram on the issue price. SGB ​​can be paid in cash (up to Rs 20,000), demand draft, check and electronic banking. Gold bonds can be redeemed at the rate fixed by IBJA.

Where to buy Gold Bond

Gold Bonds can be purchased directly or through an agent from commercial banks, Stock Holding Corporation of India Limited, Clearing Corporation of India Limited, certain post offices, recognized stock exchanges, National Stock Exchange of India Limited and Bombay Stock Exchange Limited. Is. Fixed interest will be given on gold bonds at the rate of 2.50 percent. Gold bonds can be used as collateral for taking loans.

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How much tax will be charged on interest

KYC documents will be required to take gold bonds and these will be the same documents that are required to buy physical gold. Voter ID, Aadhar or PAN card or passport and other KYC documents will be required. It will be mandatory to mention PAN number with every application for Sovereign Gold Bond. As per the Income Tax Act, 1961, the interest on Sovereign Gold Bond will be taxed. If a person gets capital gains by redeeming gold bonds, then he will not have to pay any tax. Benefit of indexation on Long Term Capital Gains from transfer of Gold Bond will be given.(Reference,