Sovereign Gold Bond’s 4th tranche opens on Monday; know returns, eligibility, price  |  Photo Credit: PTI
The fourth tranche of the government’s Sovereign Gold Bonds (SGBs) 2021-22 (Series IV) will be opened for subscription on Monday, July 12.
As per the schedule of the gold bond scheme, 2021-22 by the Reserve Bank of India (RBI), the fourth tranche of SGBs 2021-22 will open for subscription from July 12-16 with the issuance date of July 20, 2021.
The issue price of the bond during the subscription period shall be Rs 4,807 per gram, as also published by RBI. A discount of Rs 50 will also be provided to those investors who apply online and the payment is made through digital mode.
“The government of India in consultation with the Reserve Bank of India has decided to allow a discount of Rs 50 (Rupees Fifty only) per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors the issue price of Gold Bond will be Rs 4,757 per gram of gold,” said the Ministry of Finance in a statement.
Gold Bond Scheme 2021-22 important dates
Important dates for Sovereign Gold Bond 2021-22 Series I-IV
The subscription period for SGB 2021-22 Series Series IV is between July 12 and July 16, 2021, with an issuance date on July 20, 2021; Series V between August 09-13, 2021 with issuance date fixed on August 17, 2021, and Series VI will open for subscription between Aug. 30- Sept.03, 2021, and will be issued on September 07, 2021.
The gold bonds will be sold through Scheduled Commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
Who is eligible
Gold bonds are issued by RBI on behalf of the government. They are denominated in multiples of 1 gram(s) of gold and will be sold to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
Maturity, eligibility & how much can you subscribe
The maturity period of these gold bonds will be 8 years with an option to exit after the fifth year to be exercised on the next interest payment dates. The minimum permissible investment will be 1 gram of gold.
The maximum limit of subscription for an individual is fixed at 4 Kgs, 4 Kgs for HUF and 20 Kgs for trusts and similar entities per fiscal (April-March) notified by the government from time to time.
The annual ceiling will include bonds subscribed under different tranches during initial issuance by the government and those purchased from the secondary market. In case of joint holding, the investment limit of 4 Kgs will be applied to the first applicant only.
Sovereign gold bond returns
The price of the bonds will be fixed in Rupees on the basis of a simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last 3 working days of the week preceding the subscription period. The investors will get at a fixed internet rate of 2.5 percent per annum payable semi-annually on the nominal value.
The interest on gold bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bon SBGs be also used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the RBI from time to time.