What Is Sovereign Gold Bond Scheme: The dates for the Fourth subscription tranche of the Sovereign Gold Bond Scheme SGB for 2023–2024 have been made public by the Reserve Bank of India. The letter states that the SGB program’s Fourth series would start on February 12 and run through February 16, 2024. Public disclosure of the issue price is still pending. The Fourth series of this year’s SGB system ran from February 21, 2024.
What Is Sovereign Gold Bond Scheme?
The RBI provides government securities known as Sovereign Gold Bonds, which serve as a substitute for real gold. These SGBs have a gram value and are distributed frequently throughout the year. The leading financial institution sets the issuing price for each series. There are two places to purchase and sell: during the series or on a secondary market.
The Scheduled Commercial banks (apart from Small Finance Banks, Payment Banks, and Regional Rural Banks) and authorized post offices, as well as reputable stock exchanges like the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited, will sell the SGBs.
What Is Sovereign Gold Bond Scheme Overview?
| Scheme Name | Sovereign Gold Bond Scheme |
| Launched By | Govt. Of India |
| Bond Distributed By | Reserve Bank of India (RBI) |
| Securities | The RBI provides government securities. |
| Purchase Mode | Online |
| Join for the Latest Updates | Click here |
What Is Sovereign Gold Bond Scheme Price?
The fourth phase of the Sovereign Gold Bond (SGB) Scheme 2023–24 will have an issue price of Rs 6,263 per gram (including Online Payment Charge of RS.50/-) of gold, in line with a Reserve Bank of India (RBI) statement.
Starting on Monday, this tranche will be accessible for subscription for five days. It will be possible to register for the Sovereign Gold Bond Scheme 2023-24 Series IV from February 12 until February 16, 2024. According to RBi, these investors who register online would pay Rs 6,263 per gram of gold for a gold bond, which represents a Rs 50 per gram reduction.
RBI Bonds: Latest Updates
The RBI distributes bonds on the Center’s behalf. Banks, the Stock Holding Corporation of India Limited (SHCIL), specific post offices, and the well-known stock exchanges NSE and BSE will all sell the bonds. With the intention of decreasing the demand for physical gold and transferring a portion of domestic savings from the purchase of gold to financial savings, the initiative was launched in November 2015.
The simple average closing price of 999-purity gold for the three working days prior to the subscription period, as reported by the India Bullion and Jewellers Association Limited, is the basis for determining the bond price in Indian rupees. The bond will be in effect for eight years. A maximum of 4 KG may be subscribed by an individual, 4 KG by a HUF, and 20 KG by trusts and other like organizations per fiscal year.
Who Can Invest in Sovereign Gold Bond Scheme?
Hindu Undivided Families (HUFs), charity trusts, educational institutions, and trusts are among the investors qualified to participate in the SGB tranche. A resident of India as defined by the Foreign Exchange Management Act of 1999 is also eligible to invest. If a person moves to a different part of the world, they can keep their SGBs until they reach early adulthood.
What Is Sovereign Gold Bond Scheme Series IV?
The India Bullion and Jewellers Association Ltd (IBJA) reports that the simple average closing price for 999-purity gold on the last three business days of the week before the subscription period, or February 14, February 15, and February 16, 2024, will determine the nominal value of the bond.
Following discussions with the Reserve Bank of India, the Indian government has decided to offer investors who apply online and pay for their application through a digital channel a 50/-per-gramme reduction off the nominal value. For each unit of a Gold Bond, these investors will pay Rs. 6,263/- (Rupees Six Thousand and Two Hundred Sixty-Three only).
Denomination of the SGB Scheme
- Multiples of grams of gold will be used to measure the SGBs, with one gram acting as the base unit.
What is the Sovereign Gold Bond Scheme Lock In Period?
- With an early redemption option available after the fifth year on the interest due date, the SGB will have an eight-year duration.
Minimal Amount of Investment
- The smallest amount of gold that can be invested will be one gram.
Maximum Allowance for Investment
The government updates its restrictions on a regular basis, allowing individuals to subscribe up to 4 kg, HUFs up to 4 kg, and trusts and other similar organizations up to 20 kg per fiscal year (April-March). To this end, a self-declaration will be accepted. The yearly selling will apply to SGBs subscribed to under different tranches and those bought on the secondary market.
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What Is Sovereign Gold Bond Scheme Benefits?
SGBs are a very profitable purchase because of their many benefits. The investor does not need to keep or store the gold physically, so there are no longer any storage or security concerns. In addition, the investor gets their money returned at the price of gold as of right now. The investor now has greater control over the gold redemption’s timing and cost.
Co-Holder
In a joint holding scenario, the 4 KG investment restriction is solely applicable to the initial application.
What Is Sovereign Gold Bond Scheme Issue Price?
According to the India Bullion and Jewellers Association Limited, a simple average of the final three working days of the week prior to the subscription period (IBJA) will be used to determine the price of Sovereign Gold Bond (SGB) in Indian Rupees. Those investors who enroll online and pay digitally will receive a reduction of Rs. 50 per gram off the SGB issue price.
What Is Sovereign Gold Bond Scheme Redemption Cost?
The redemption price will be given in Indian Rupees and will be based on a simple average of the gold 999 pure closing prices that IBJA Ltd. reported over the preceding three working days.
What Is Sovereign Gold Bond Scheme Purchase Place?
SGBs will be sold either directly or through agents through commercial banks, the Stock Holding Corporation of India Limited (SHCIL), the Clearing Corporation of India Limited (CCIL), the National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE).
What Is Sovereign Gold Bond Scheme Interest Rate?
- Investors will receive the nominal value every other year at a fixed rate of 2.50% every year.
What Is Sovereign Gold Bond Scheme LTV?
Loan security may be obtained through the SGBs. The loan-to-value (LTV) ratio must be set at the same level as the Reserve Bank’s typical gold loan.
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What Is Sovereign Gold Bond Scheme KYC Documents?
The know-your-customer (KYC) policies that govern the purchase of physical gold will also be applicable.
- A passport,
- An Aadhaar card,
- a PAN card,
- a TAN card,
- voter identification, and
- other KYC documents would be required.
The “PAN Number” that the Income Tax Department issues to individuals and other businesses must be included with every application.
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What Is Sovereign Gold Bond Scheme TAX Implications?
Interest on SGBs is taxed in accordance with the provisions of the Income Tax Act of 1961 (43 of 1961). Taxes do not apply to capital gains that come from an individual redeeming their SGB.
There will be long-term capital gains from the transfer of the SGB that qualify for indexation benefits.
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What Is Sovereign Gold Bond Scheme Eligibility?
Participants in the Sovereign Gold Bond Scheme must fulfill the following simple qualifying requirements.
- Indian residents: Only Indian residents are eligible for this initiative; the Foreign Exchange Management Act of 1999 set the qualifications.
- Individuals/groups: Anyone can invest in this plan as long as they are an Indian resident, including individuals, associations, trusts, HUFs, etc. Under the program, one may invest in bonds together with other eligible participants.
- Minors: On behalf of minors, parents or guardians may purchase this bond.
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FAQs About What Is Sovereign Gold Bond Scheme
What is the minimum and maximum amount I can invest?
A. One gram of gold is the bare minimum needed to issue a sovereign gold bond. There are various upper bounds that vary depending on the investment. Organizations such as universities and trusts have a 20 kg weight limit. The 4 kg limit applies to both humans and HUFs.
How SGB payments are made?
A. Payment options accepted by SGBs include demand drafts, checks, internet banking, and cash (up to Rs. 20,000 maximum).
What Is the Bond Period for the Scheme?
A. The entire tenor of the bond is eight years. Investors can opt out of the bond at any time after the fifth year, but not before.
Is SGB permitted to trade?
A. Trading of the SGBs will be permitted.
