Sovereign gold bonds pay interest at a rate of 2.50 per cent every half year. Income from interest on bonds is taxable under income tax law. Both the document and demat format of this bond have been made available.
24 carat purity guarantee scheme by central government in the name of Sovereign Gold Bond (Sovereign Gold Bond Scheme)Completing today. Cheap gold is being sold under this scheme. The gold is being sold by the RBI on behalf of the Government of India. Gold is sold within the period announced by the government. This gold is sold with the assurance of purity. Sovereign gold is offered as a brand instead of ordinary physical gold. Guaranteed 24 carat gold is offered in this scheme. The issue price of SGB is determined based on the average closing price of 24 carat gold during the last 3 trading sessions. The current issue price is Rs 5091 per gram. The Gold Bond Series-1 is open for subscription till June 24, the Reserve Bank said in a statement.
What are the benefits of SGB?
Sovereign gold bonds pay interest at a rate of 2.50% every half year. Income from interest on bonds is taxable under income tax law. Both the document and demat format of this bond have been made available. Can be traded in the secondary market. The finance minister said that individual investors have been exempted from capital gains tax on capital earned on redeeming SGB. Meanwhile, RBI’s SGB scheme is open for subscription. Any investor can invest.
The benefits of investing in SGB
- Assured return: Sovereign Gold offers bonds to investors at an interest rate of 2.5% per annum. This interest will be paid on a semi-annual basis.
- Exemption from Capital Gains Tax: There will be no capital gains tax on redemption.
- Loan facility: Can also be used as collateral for a loan.
- No storage issues: Safe in which there is no problem of storage like physical gold.
- Liquidity: Can be traded on the exchange.
- Exemption from GST and making charges: Physical gold is the opposite. GST and making charge is not charged.
Rs 50 per gram discount on online purchases
The government, in consultation with the RBI, has offered a discount of Rs 50 per gram to customers who apply online and make digital payments. Anyone can choose to pay by demand draft or check or electronic banking.
Where to buy?
Gold bonds can be purchased directly or through agents 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. Gold bonds will be offered at a fixed interest rate of 2.50 per cent. Gold bonds can be used as collateral to get a loan.