Sovereign Gold Bonds 2023-24: Even as investors are rushing to the primary share market amid back-to-back successful IPOs, the government has also announced two tranches of Sovereign Gold Bonds 2023-24. The SGB 2023-24 Series III will be opened for subscription on December 18, while the SGB 2023-24 Series IV will begin on February 12.
Sovereign Gold Bonds 2023-24 Series III
The Sovereign Gold Bonds 2023-24 Series III will be opened for public subscription between December 18 and December 22, 2023. The date of the bonds issuance has been fixed as December 28, 2023.
Sovereign Gold Bonds 2023-24 Series IV
The Sovereign Gold Bonds 2023-24 Series III will be opened for public subscription between February 12 and February 16, 2024. The date of issuance has been fixed as February 21, 2024.
“The SGBs will be sold through Scheduled Commercial banks (except Small Finance Banks, Payment Banks and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited,” the finance ministry has said in a statement.
Sovereign Gold Bonds 2023-24: Who Is Eligible To Buy?
The SGBs, which will be issued by the Reserve Bank of India on behalf of the government, will be restricted for sale to resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions, according to the statement.
Sovereign Gold Bonds 2023-24: Price, Interest Rate Returns
Once issued, the SGB investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.
The price of SGB will be fixed in Indian rupees on the basis of a simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the past three working days of the week preceding the subscription period. The issue price of the SGBs will be less by Rs 50 per gram for the investors who subscribe online and pay through digital mode.
Payment for the SGBs will be through cash payment (up to a maximum of Rs 20,000) or demand draft or cheque or electronic banking.
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Sovereign Gold Bonds 2023-24: Minimum Investment
The minimum permissible investment will be one gram of gold, while the maximum limit of subscription shall be four kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal year (April-March) notified by the government from time to time.
The bonds will be denominated in multiples of grams of gold with a basic unit of one gram and their tenure will be for a period of eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable.
A self-declaration to this effect will be obtained. The annual ceiling will include SGBs subscribed under different tranches, and those purchased from the secondary market, during the fiscal year.
“The SGBs will be issued as Government of India Stock under the Government Securities Act, 2006. The investors will be issued a Certificate of Holding for the same. The SGBs will be eligible for conversion into demat form,” the ministry said.
Sovereign Gold Bonds 2023-24: Redemption
The redemption price will be in Indian Rupees based on a simple average of the closing price of gold of 999 purity, of the previous three working days published by IBJA Ltd.
Sovereign Gold Bonds 2023-24: Can It Be Used As Collateral For Loans?
The bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to the ordinary gold loan mandated by the Reserve Bank from time to time, the finance ministry said in the statement.
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Sovereign Gold Bonds 2023-24: Income Tax Applicability
“The interest on SGBs shall be taxable as per the provision of the Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on transfer of bond. SGBs shall be eligible for trading,” it added.
