The Reserve Bank of India (RBI) revealed the Sovereign Gold Bond (SGB) Scheme Series III schedule for the fiscal year 2023-2024, which is set to commence on December 18 and conclude on December 22. The RBI has established the issue price for SGBs 2023-24 Series III at Rs 6,199 per gram, with a discount of Rs 50 per gram accessible for online subscribers.
The value of these bonds is determined by computing the simple average of the closing price of 999 purity gold, according to the India Bullion and Jewellers Association (IBJA).
According to the RBI press release, “Subscription for the bonds may be made in the prescribed application form Form A or in any other form as near as thereto, stating clearly the units (in grams) of gold and the full name and address of the applicant. Every application must be accompanied by valid ‘PAN details’ issued by the income tax department to the investor(s). Designated scheduled commercial banks, designated post offices, Stock Holding Corporation of India Ltd., Clearing Corporation of India Ltd. and the recognised stock exchanges, National Stock Exchange of India and Bombay Stock Exchange are the receiving offices which are authorised to receive applications for the Bonds either directly or through agents and render all services to the customers. The Receiving Office shall issue an acknowledgement receipt in Form B to the applicant.”
All online applications should be accompanied by the email ID of the investor/s, which should be uploaded on the Ekuber portal of the Reserve Bank of India along with the subscription details, per the RBI press release.
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The SGB carries an eight-year maturity period, offering investors the choice to exit the scheme starting from the fifth year on interest payment dates. Additionally, these bonds become tradable on stock exchanges within a fortnight of issuance, per RBI notifications.
For those seeking gold investments without the concerns of physical storage, SGBs present an appealing opportunity. These government-supported securities offer the assurance and safety essential for investment trust.
The Government of India (GoI) doesn’t require TDS payments or GST for SGB purchases or redemption. However, individuals are exempt from capital gains tax upon redeeming SGBs, making it a tax-efficient investment. Additionally, if the bonds are sold before maturity, capital gains tax can be paid after utilising indexation benefits.
Investing in SGBs assures returns and security, yet it necessitates strategic planning and a grasp of gold price trends and market dynamics. Seeking expert advice before diving into SGB investments is suggested by experts.