Sovereign Gold Bonds 6th Tranche opens on 30th August

The sixth tranche of the Sovereign Gold Bonds issue for FY22 (the last for H1) opens for subscription on 30-Aug and closes on 05-Sep. This SGB tranche is priced at Rs.4,732 per gram, which is lower than the fifth tranche. In addition, digital applications get an additional discount of Rs.50 per gram, so the effective price will be Rs.4,682 per gram.

Sovereign Gold Bond prices are linked to benchmark 24-carat gold prices in the Indian market and units equivalent to grams of gold are issued. The returns on gold bonds will depend on the price of gold but there is an assured interest of 2.50% per year payable semi-annually. The gold principal of SGBs and the interest are guaranteed by the government.

Also Read: Merit in Buying Digital Gold

Sovereign gold bonds can be held in physical certificate form or in your Demat account. These bonds have a maturity of 8 years but after 5 years the RBI offers a buyback window for investors. In addition, SGBs are also listed after a period of 6 months, although liquidity in secondary markets is quite thin. Only if SGBs are held till maturity, the capital gains are free of tax. Otherwise, gains will be taxed at non-equity rates. Interest will be fully taxable.

Investors can buy a minimum of 1 gram of gold equivalent and a maximum of 4 kg per person and 20 kg in the case of trusts in one year. However, multiple family members can each buy up to 4 kg in a year. These gold bonds can be purchased from designated post offices, from SHCIL, from the online broking platforms of BSE and NSE as well as through banks. However, payment banks and SFBs are not eligible to sell Sovereign Gold Bonds.

Since 2015, the government has sold gold bonds worth Rs.32,389 crore till date.
 

See: How to buy Digital Gold