Sovereign Gold Bond Price, Dates, SGB 2022 Price: The government has launched the next tranche of Sovereign Gold Bonds (SGBs). The Sovereign Gold Bond 2022-23 Series III tranche opened for subscription on December 19. The subscription window will close on December 23. The fourth tranche would be issued on March 14, 2023.

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Denominated in grams of gold (999 purity), sovereign gold bonds are government-backed securities. They are issued by RBI on behalf of the government. SGBs are also substitutes for physical gold.  

Where to buy Sovereign Gold Bond?

The SGBs are sold through scheduled commercial banks like the State Bank of India (SBI), HDFC Bank and other banks.

Sovereign Gold Bonds can also be purchased from Stock Holding Corporation of India Ltd (SHCIL), Clearing Corporation of India Ltd (CCIL), designated post offices and recognised stock exchanges, namely the National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd.

Sovereign Gold Bond Interest Rate

The investors will be compensated at a fixed rate of 2.50 per cent per annum. The amount is payable semi-annually on the nominal value.

Sovereign Gold Bond Scheme 2022-23 (Series III) – Issue Price

The Government of India, in consultation with the Reserve Bank of India, fixes the issue price. The price of the latest issue has been fixed at Rs 5,409 per unit/gram.

Investors get a discount of Rs 50 per unit for buying online and making payment through digital mode.  Accordingly, those buying online will have to pay Rs 5,359.

Sovereign Gold Bond: Minimum and Maximum Investment

The minimum permissible investment in SGBs is 1 unit or 1 gram.

The maximum limit of subscription is 4 kg for individuals, 4 kg for Hindu Undivided Family and 20 kg for trusts and similar entities per fiscal year (April-March) notified by the government from time to time.

Sovereign Gold Bond:

1. No design or making charges

When one buys physical gold, he or she pays a design or making charges that could be from 15 to 20 per cent. For instance, if you buy 20 grams of gold ornament from a jeweler, you pay the price of 20 grams of gold as well as making/ labour charge. In a few cases, one also has to pay a design charge. In case of SGBs, one doesn't have to pay any making charge. You pay the amount for the metal only.

2. No GST or STT

When one buys physical gold, he/ she is supposed to pay GST whereas SGBs are free of tax which is not similar in the case of physical gold. Moreover, there is no Security Transaction Tax imposed on trades in SGBs as well.

3. Impurities free

SGBs bonds are denoted by 999 purity. Physical gold has a chance that metal could be impure.

4. No default risk

Since SGBs are issued by the Reserve Bank of India on behalf of the Central government, there is no risk of default.

Also, read- Sovereign Gold Bond Scheme 2022: Subscription opens today - Check issue price, how to buy RBI gold bond | SGB 2022 Price, SGB 2022 Interest Rate

5. No storage risk or cost for storage

Storing physical gold in your house is always a risky affair. Storing the physical gold at bank lockers also adds an additional cost. As per the rule, banks don't compensate if the contents of the locker are stolen or damaged. On the other hand, sovereign gold bonds are safer.

6. Tradable on exchanges

SGBs are tradable on exchanges. SGBs can also be transferred to any other eligible investor.

Besides, the government also gives 2.5 per cent interest yearly on the amount of investment. The interest is credited semi-annually into the bank accounts of investors. The last interest is payable on maturity along with the principal.

7. No capital gains tax

The default maturity period of SGBs is 8 years. But the government gives the option to exit after 5 years. The capital gains tax at the time of maturity is exempted. If you exit before 5 years, you will have to pay capital gains tax.

In the case of physical gold, one has to pay tax at the time of selling the yellow metal to a jeweler.

However, interest (2.50 per cent per annum on the amount of investment) accumulated on the SGBs is taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961).
TDS is also not applicable to the bond.

8. Collateral for loans

SGBs are eligible to be used as collateral for loans. The Loan to Value ratio is the same as applicable to ordinary gold loans prescribed by RBI from time to time. However, sanctioning loans against SGBs is subject to the decision of the financial institutions. It cannot be inferred as a matter of right.

9. DEMAT form

Investors can hold SGBs in Demat form. This means that one does not need to carry a physical paper all the time.

10. Returns

The quantity of gold for which the investor pays is protected in SGBs since they receive the ongoing market price at the time of redemption. For instance, if one buys 1 unit (1 gram of gold) at Rs 5,000 and the market price of gold rises to 8,000 per gram at the time of maturity, he/she will get the prevailing market price.

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