Sovereign Gold Bond Subscription Opens, Know Price And Other Details

Subscription has opened for the first tranche of the Sovereign Gold Bond Scheme (SGB), 2023-24, guaranteed by the central government. In this, a price of Rs 5,926 has been fixed for per gram of gold. It will be available for subscription till June 23. Its settlement date is June 29. For this, investors who book subscription online will get an additional discount of Rs 50.

These gold bonds are issued by the Reserve Bank of India (RBI) on behalf of the central government. They get a fixed interest rate of 2.5 percent per annum, which is paid on a half-yearly basis. Final interest is paid along with the principal amount on maturity. The second part of SGB will be available from 11 to 15 September. SGB ​​was launched by the government about eight years ago under the Gold Monetization Scheme. In this scheme guaranteed by the central government, Hindu Undivided Families (HUF), charitable institutions, trusts, universities or individuals living in the country can buy gold bonds.

SGB ​​can be purchased from commercial banks (excluding small finance banks), payment banks, regional rural banks and Stock Holding Corporation of India Limited (SHCIL). This purchase can be done directly on the stock exchanges or through agents. Sovereign Gold Bonds were introduced to reduce the demand for physical gold. It also aims to channelize the savings used to buy gold into financial savings. The scheme has a lock-in period of eight years. However, exit options are available from the fifth year onwards. Premature exit option is available on the interest payment dates.

Tax has to be paid on the interest received in this scheme. Under the rules of the Income Tax Act, long-term capital gains on transfer of SGB are eligible for indexation benefit. The popularity of this scheme has increased in the last few years. In this, the participation of institutional investors as well as individual investors has also increased. However, despite this, the demand for gold has not been affected much. The investors of this scheme have also benefited from the rise in the price of gold in the last few years.

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