SGB Series IV FY24 opens today: The latest series of sovereign gold bonds opens today, February 12, for subscription. The issue price for subscription of SGB 2023-24 Series IV has been fixed at Rs 6,263 per gram of gold, according to the RBI.
Subscription will be open until Friday, provided that the central government does not close the scheme before the specified period with notice. The SGB issue date is February 21.
What is the advantage of SGB?
The amount of gold the investor pays for is protected and he can receive the current market price at the time of redemption or early redemption. Plus, there is no storage risk or cost. There are also no manufacturing costs and purity concerns, as there are with gold in jewelry form. There is no loss of certificates etc. as the RBI holds the bonds on its books in demat form.
According to RBI, investors are assured of the market value of gold at the time of maturity and periodic interest.
There is a possibility of capital loss if the market price of gold falls, but the investor will not lose the gold in terms of units paid by him, according to the RBI.
Is there a discount on SGB?
Although the central bank has not named it as such specifically, a customer applying online through the website of the listed commercial banks will have to pay an issue price of Rs 50 per gram less than the face value. Payment must be made via digital mode to benefit from this.
Who can invest in SGBs?
If you are a resident of India within the meaning of the Foreign Exchange Management Act, 1999, you may invest in SGB. Individuals, HUFs, trusts, universities and charitable institutions can all invest in SGBs.
If you were a resident of India but changed your status to non-resident, then you can hold the sovereign gold bonds until their prepayment or maturity.
Joint ownership is also permitted for SGBs, and minors can also invest, but the request must be made by their guardian.
Each member of your family can purchase SGBs in their own name, provided they meet the eligibility criteria.
Is there an investment limit for SGBs?
For the uninitiated, bonds are issued in denominations of 1 gram of gold and its multiples. The minimum investment is 1 gram, and a maximum of 4 kg for individuals and HUF and 20 kg for trusts and similar entities.
In the case of joint ownership, the limit applies to the first applicant.
An investor or trust can purchase SGBs every year, since the maximum limit only applies for one tax year (April-March).
What is the interest rate on SGBs?
The bonds bear interest at the rate of 2.50 percent per annum on the initial investment amount. Interest will be credited semi-annually to the investor’s bank account. The final interest will be payable at maturity with the principal.
Are SGBs taxed? How?
Interest on bonds is taxable. Capital gains tax resulting from the buyout of SGB was exempt. “TDS is not applicable on the bond. However, it is the responsibility of the bondholder to comply with the tax laws,” according to the RBI.