New difficulty of sovereign gold bond scheme to open subsequent week. Key issues to know

The authorities has determined to difficulty two tranches of sovereign gold bonds (SGBs) in the course of the first half of the present monetary yr.

The date for subscription for 2023-24 Series I is June 19-23, 2023, whereas for Series II is September 11-15, 2023, a finance ministry assertion mentioned.

Sovereign gold bond scheme: Key issues to knowEligibility

The SGBs might be restricted on the market to resident people, HUFs, Trusts, Universities, and Charitable Institutions.

Denomination

The SGBs might be denominated in multiples of gram(s) of gold with a fundamental unit of One gram.

Tenor

The tenor of the SGB might be for a interval of eight years with an possibility of untimely redemption after fifth yr to be exercised on the date on which curiosity is payable.

Minimum measurement

The minimal permissible funding might be One gram of gold.

Maximum restrict

The most restrict of subscription shall be 4 Kg for people, 4 Kg for HUF, and 20 Kg for trusts and comparable entities per fiscal yr (April-March) notified by the Government now and again. A self-declaration to this impact might be obtained from the traders on the time of creating an software for a subscription. The annual ceiling will embody SGBs subscribed below totally different tranches, and people bought from the secondary market, in the course of the fiscal yr.

Joint holder

In the case of joint holding, the funding restrict of 4 Kg might be utilized to the primary applicant solely.

Issue worth

The worth of SGB might be fastened in Indian Rupees on the idea of the straightforward common of the closing worth of gold of 999 purity, printed by the India Bullion and Jewellers Association Limited (IBJA) for the final three working days of the week previous the subscription interval. The difficulty worth of the SGBs might be much less by ₹50 per gram for the traders who subscribe on-line and pay via digital mode.

Payment possibility

Payment for the SGBs might be via money fee (as much as a most of ₹20,000) or demand draft or cheque or digital banking.

Issuance type

The SGBs might be issued as Government of India Stock below Government Securities Act, 2006. The traders might be issued a Certificate of Holding for a similar. The SGBs might be eligible for conversion into demat type.

Redemption worth

The redemption worth might be in Indian Rupees primarily based on a easy common of the closing worth of gold of 999 purity, of the earlier three working days printed by IBJA Ltd.

Interest fee

The traders might be compensated at a set fee of two.50 % each year payable semi-annually on the nominal worth.

Collateral

The SGBs can be utilized as collateral for loans. The loan-to-value (LTV) ratio might be as relevant to any atypical gold mortgage, mandated by the Reserve Bank now and again.

KYC documentation

Know-your-customer (KYC) norms would be the identical as that for the acquisition of bodily gold. KYC paperwork equivalent to Voter ID, Aadhaar card/PAN, or TAN /Passport might be required. Every software have to be accompanied by the ‘PAN Number’ issued by the Income Tax Department to people and different entities.

Tax therapy

The curiosity on SGBs shall be taxable as per the supply of the Income Tax Act, 1961 (43 of 1961). The capital good points tax arising on redemption of SGB to a person is exempted. The indexation advantages might be supplied to long-term capital good points arising to any particular person on switch of the SGB.

Tradability

SGBs shall be eligible for buying and selling.

The SGBs might be offered via Scheduled Commercial banks (besides Small Finance Banks, Payment Banks, and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated put up places of work, and recognised inventory exchanges — National Stock Exchange of India Limited and Bombay Stock Exchange Limited, it mentioned.

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Updated: 15 Jun 2023, 09:21 AM IST