- Date : 16/06/2023
- Read: 3 mins
All the necessary information on Sovereign Gold Bonds 2023-24 for investors interested in long-term non-physical gold investment with fixed interest income.
- The Sovereign Gold Bonds Scheme 2023-24 has been announced by the RBI
- The scheme is available for investment in two tranches
- SGB is suitable for non-physical investment in gold with assured interest income
New issues of Sovereign Gold Bonds (SGBs) will be available to investors in two tranches. This was confirmed in a press release by the Reserve Bank of India (RBI) on 14 June 2023.
Key details – Sovereign Gold Bond Scheme 2023-24
- SGB 2023-24 Series I – Date of subscription – 19-23 June 2023 – Date of issuance – 27 June 2023
- SGB 2023-24 Series II – Date of subscription – 11-15 September 2023 – Date of issuance – 20 September 2023
- The bonds will be sold through scheduled commercial banks, excluding small finance, payment and regional rural banks; Stock Holding Corporation of India, post offices, National Stock Exchange and Bombay Stock Exchange
- It can be bought by individuals, Hindu Undivided Families (HUFs), trusts, universities, and charities
- It is sold in denominations, starting with one gram and in multiples thereof
- Maximum investment, including both tranches and from the secondary market, is 4kg for individuals and HUFs, and 20kg for trusts and other entities. The 4kg limit is applicable to the first applicant in the case of joint holding
- SGBs have a tenor of eight years, with the option of premature redemption after five years
- The simple average of the India Bullion and Jewellers Association Limited’s closing price for gold of 999 purity, for three working days of the week before the subscription period, will be the price of the SGB. A Rs 50 per gram discount is available for online purchases and digital payment
- SGB up to Rs 20,000 can be bought in cash. Beyond that, non-cash modes like cheques, demand drafts, and online banking must be used
- A fixed interest rate of 2.5% will be paid to the investor, payable twice a year on the nominal value. The interest income is taxable under the Income Tax Act, 1961
- Capital gain tax on redemption of SGB is exempt in the case of an individual. Indexation benefits are available on long-term capital gains made on transfers of SGBs
- The KYC norms of physical gold purchase are applicable for SGB purchases as well
How to Apply for SGB
The application form for SGBs can be downloaded from the RBI website or from other issuing entities.
- You must indicate the mode of subscription and the grams of gold applied for
- You must provide your PAN, personal details, bank details and depository participant details (for demat holding of the SGBs)
- Witness details and signature is also required
- Documentations, as mentioned in the form, must be furnished
SGB is a suitable investment if you are looking for non-physical exposure to gold, along with an assured interest income. While the tenor of the investment is long term, you can trade it in the secondary market.
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