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Sovereign gold bonds subscription to begin from Monday. All you need to know
The government launched the scheme in November 2015 under the Gold Monetisation Scheme.
The tenth tranche of Sovereign Gold Bond 2020-21, which is issued by the Reserve Bank India (RBI) on behalf of the government, will open for subscription on Monday and will continue till January 15, 2021. The issue price of the gold bonds is fixed at ₹5,104 per gram of gold and their issuance is scheduled for January 19.
The price of the gold bonds, which is tradable commodities and can also be used as collateral for loans, has been derived from a simple average of the closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last three working days of the week preceding the subscription period, RBI has said.
The central bank added the government has decided to offer a discount of ₹50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. "For such investors, the issue price of gold bond will be ₹5,054 per gram of gold," the central bank said.
The issue price for Series IX, which were open for subscription from December 28, 2020, to January 1, 2021, was ₹5,000 per gram of gold.
Also Read | Gold price falls by ₹2,000, Silver by ₹6,000
Resident individuals, Hindu Undivided Family (HUF)s, Trusts, Universities and Charitable Institutions are eligible to apply for the subscription of the bonds. While there will be no capital gains tax on redemption of the sovereign gold bonds, the interest on the bonds which is fixed at 2.50 per cent per annum is taxable as the Income Tax Act, 1961 (43 of 1961). The interest is payable semi-annually on the nominal value.
Investors can buy gold bonds from commercial banks, Stock Holding Corporation of India Limited (SHCIL), post offices designated by RBI and recognised stock exchanges, either directly or through agents.
The government launched the scheme in November 2015 under the Gold Monetisation Scheme with the aim to bring in a change in the perspective of purchasing gold for financial investment and saving instead of for domestic purposes.
Precious metals have been the greatest performers of 2020 in the market in wake of the raging coronavirus pandemic. However, on Friday, gold prices fell by over ₹2,000 and silver fell by more than ₹6,000. The high yields of US Treasuries, change in the administration of the United States recovering the dollar and fast rollout of vaccines all around the world has changed the market sentiments. While the stocks are rising with the increasing optimism of economic recovery, gold bonds are considered a safe and secure investment, considering the unpredictability around the economy and the deadly virus.
