Sovereign Gold Bonds Scheme, The indexation advantage on long-term capital profits isn’t available for SGBs which might be bought or transferred after a year from the date of purchase. Indians value gold more tremendously than its market value. in recent times, there are methods to very own gold without incurring the dangers associated with it or having to pay for its manufacturing and disposal. sovereign gold bonds are one such desire presented through the Indian government and the Reserve Bank of India (rbi). here, gold can be possessed as a certificate.
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What is a Sovereign Gold Bond?
In order to provide an alternative to investing in actual gold, the Indian government launched the Sovereign Gold Bond (SGB) in November 2015 as part of the Gold Monetization Scheme. The market has seen a significant drop in the demand for physical gold over time. In addition to monitoring the asset’s export-import value, SGBs also guarantee transparency.
SGBs are regarded as secure government securities. The multiples of grams of gold are used to represent its worth. Due to their perceived ability to replace actual gold, SGBs have seen a sharp rise in investors. You just need to speak with an agent or broker who has been approved by SEBI if you want to buy an SGB. The corpus (based on the bond’s current market value) will be sent to your registered bank account upon redemption.
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Sovereign Gold Bond Next Issue and Upcoming Issues
Sovereign Gold Bond 2024-25 Series
Based on historical patterns, the Reserve Bank of India (RBI) may announce the Sovereign Gold Bond (SGB) 2024-25 first tranche (Series 1) in June 2024. In the past, the RBI has issued four tranches of SGBs throughout the April–March fiscal year, beginning with the June Series 1 issuance. The RBI has not yet made any announcements on the SGB 2024–25 series, though.
Sovereign Gold Bond 2023-24 Series IV
| Subscription Period | Date of Issuance | Investment Limit | Interest | Issue Price Per Gram |
| 12 February 2024 – 16 February 2024 | 21 February 2024 | 1 gm to 4 kg | 2.5% per annum | Rs. 6,263 |
Sovereign Gold Bond Price History
The price history of SGB for FY 2023-24 is as follows:
| Series | Month | Price per Gram |
| Series 1 | June 2023 | Rs. 5,926 |
| Series 2 | September 2023 | Rs. 5,923 |
| Series 3 | December 2023 | Rs. 6,199 |
| Series 4 | February 2023 | Rs. 6,263 |
The price history of SGB for FY 2022-23 is as follows:
| Series | Month | Price per Gram |
| Series 1 | June 2022 | Rs. 5,041 |
| Series 2 | August 2022 | Rs. 5,091 |
| Series 3 | December 2022 | Rs. 5,409 |
| Series 4 | March 2023 | Rs. 5,611 |
The price history of SGB for FY 2021-22 is as follows:
| Series | Month | Price per Gram |
| Series 1 | May 2021 | Rs. 4,777 |
| Series 2 | May 2021 | Rs. 4,842 |
| Series 3 | June 2021 | Rs. 4,889 |
| Series 4 | July 2021 | Rs. 4,807 |
| Series 5 | August 2021 | Rs. 4,790 |
| Series 6 | September 2021 | Rs. 4,732 |
| Series 7 | October 2021 | Rs. 4,765 |
| Series 8 | November 2021 | Rs. 4,791 |
| Series 9 | January 2022 | Rs. 4,786 |
| Series 10 | March 2022 | Rs. 5,109 |
Sovereign Gold Bonds: Who Should Invest in Them?
You can think about adding at least 5%–10% of gold to diversify your holdings. It is ideal for those who have a limited tolerance for risk because it is a low-risk investment. Compared to actual gold, SGBs are quite inexpensive to buy or sell. In comparison to the actual gold, the cost of purchasing or selling the SGB is likewise low. SGBs are also an option for people who don’t want to deal with the inconveniences of keeping actual gold. This is because it’s simple to keep in Demat form, and since it’s in electronic form, no one can take it.
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Features of Sovereign Gold Bonds
Eligibility Criteria
SGB is available for investment by any Indian resident, including individuals, trusts, HUFs, colleges, and charitable organizations. Investing on behalf of a minor is another option.
Issuance of Bonds
SGBs are traded on the Stock Exchange and may only be issued by the RBI on behalf of the Central Government. Multiples of one gram of gold are used to issue it. For it, investors will get a Holding Certificate. It can also be changed to a Demat format.
KYC Documentation
The Know-your-customer (KYC) regulations that apply to the purchase of physical gold also apply to you. In order to complete KYC, you must provide copies of your identification documents, such as a PAN card, and evidence of address, such as a passport, driver’s license, or voter ID card.
Capital Gains
According to the rules of the IT Act of 1961, the interest on sovereign gold bonds is taxable. An individual’s relevant capital gains tax is waived in the event of SGB redemption. Additionally, investors who transfer bonds from one person to another until July 23, 2024, are eligible for indexation advantages on long-term capital gains. SGBs sold or transferred after July 23, 2024, are no longer eligible for the indexation advantages on capital gains.
Eligibility for SLR
Banks accounted for SLR if they purchased bonds after completing the pledging, hypothecation, or lien procedures. The Statutory Liquidity Ratio (SLR) is the amount of capital that a commercial bank must hold in cash, gold, and authorized securities prior to extending credit to clients.
Redemption Price
Based on the average closing price of 999-purity gold over the preceding three working days, the redemption price must be in rupees.
Sales Channel
As you may know, the government sells bonds via banks, the Stock Holding Corporation of India Limited (SHCIL), and a few post offices. SGBs can also be traded directly or through intermediaries on reputable stock exchanges, such as the Bombay Stock Exchange or the National Stock Exchange of India.
Commission
One percent of the total subscription amount will be collected by the receiving offices as a commission for the bond distribution. They will provide intermediaries (brokers or agents) at least half of this commission.
Sovereign Gold Bond Maturity Period
The sovereign gold bond has an eight-year maturity period. But starting in the fifth year, you have the option to sell the bond (but only on interest payout days).
Sovereign Gold Bond Maturity Redemption
The first week of August 2024 would mark the last redemption of SGB 2016-17 Series I, which was issued on August 5, 2016, at a price of Rs. 3,119. It is anticipated that these bonds would provide total yields of at least 12%. Launched in 2016, two Sovereign Gold Bonds (SGBs) are up for ultimate redemption in 2024. The eight-year bond duration of the SGB 2016 Series I, which was issued on February 8, 2016, ended on February 8, 2024. The ultimate redemption value for each SGB unit is Rs. 6,271, while the issue price of SGB 2016 Series I was Rs. 2,600 per gram.
Since March 29, 2024, is a holiday, the SGB 2016 Series II matured on March 28, 2024, following the conclusion of the 8-year term. The ultimate redemption value for each SGB unit is Rs. 6,601, and the SGB 2016 Series II was released on March 29, 2016. This year will also see the last redemption of the Sovereign Gold Bond 2016–17, Series II, and 2016–17, Series III. The projected redemption date for SGB 2016-17 Series II, which was issued on September 30, 2016, at an issue price of Rs 3,150, is September 2024. The ultimate redemption of SGB 2016-17 Series III, which was issued on November 17, 2016, at a price of Rs. 3,007, is anticipated to take place in November 2024.
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How to Buy a Sovereign Gold Bond Online?
A person can apply directly or through agents for a Sovereign Gold Bond through their banks, Stock Holding Corporation of India Limited (SHCIL), authorized post offices, and reputable stock exchanges like the National Stock Exchange of India Limited and the Bombay Stock Exchange. Additionally, SGBs can be purchased online via the websites of commercial banks that are authorized to sell them. The following is the procedure for buying SGBs via a bank’s website:
- Open the bank’s online banking account and log in.
- Select the “Sovereign Gold Bond” option after clicking on the “e-service” option.
- Click Proceed after reading the terms and conditions.
- Click Submit after completing the registration form.
- Enter the nominee’s information and the number of subscriptions in the purchasing form.
- Click Submit once all the information has been confirmed.
Faq’s
Q. Is purchasing national gold bonds a safe investment?
Ans: The RBI issues SGBs on behalf of the central government in accordance with the Government Security Act of 2006. Because it is guaranteed by the government, there is no possibility of repayment failure, making it one of the safest investment options.
Q. Which bank offers the finest sovereign gold bond investments?
Ans: The nationalized banks, designated post offices, scheduled foreign banks, and scheduled private banks all sell gold bonds. Any bank can be used to invest in SGBs. Applying for an SGB where you have a bank account is advised.
Q. Do sovereign gold bonds have no taxes?
Asn: The 2.5% yearly interest paid on SGBs is subject to marginal slab taxation. However, they are not subject to capital gains when you take out the entire amount at maturity.
Q. Do sovereign gold bonds have taxable interest?
Asn: Indeed. According to the terms of the Income-tax Act of 1961, interest on the SGBs would be subject to taxation.
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