Sovereign gold bonds on sale between Jan 14-18: Govt
The government has decided to issue new series of sovereign gold bonds between January 14 and January 18 at Rs 3,214 per gram and those who subscribe to the bonds online will get a discount of Rs 50 per gram.
Sovereign gold bond scheme
The Sovereign gold bond scheme was introduced by the government in 2015 to reduce the demand for physical gold by shifting a part of the physical bars and coins purchased every year for investment into gold bonds. The features of the scheme are:
- Sovereign gold bonds are issued by the RBI on behalf of the government
- Sovereign gold bonds are denominated in grams of gold and investments can be done in multiples of one gram with a maximum limit of 4 kg per person.
- The Resident Indians including individuals (in his capacity as an individual, or on behalf of minor child, or jointly with any other individual), HUFs, Trusts, Universities and Charitable Institutions are eligible to avail these bonds.
- The tenor of the Bond is of 8 years with an exit option in 5th, 6th and 7th year.
- The investors will also be compensated at a fixed interest rate of 2.50 per cent per annum payable semi-annually on the nominal value.
- Bonds can be used as collateral for loans.
- The interest on Gold Bonds shall be taxable and are exempted from the capital gains tax on redemption.
- Bonds will be tradable on stock exchanges.
The Sovereign gold bonds also aid in maintaining the current account deficit as most of the demand for gold in India is met through imports.