SGB Series IV FY24 opens today: The latest series of Sovereign Gold Bonds opens today, February 12, for subscription. The issue price for the subscription of SGBs 2023-24 Series IV has been fixed at Rs 6,263 per gram of gold, as per the RBI.
The subscription will be open for subscription till Friday, provided the central government does not close the scheme any time before the specified period with prior notice. The date of issuance of the SGBs is February 21.
What is the benefit of SGB?
The quantity of gold for which the investor pays is protected and she can receive the ongoing market price at the time of redemption or premature redemption. Furthermore, there is no risk and cost of storage. There is also no making charges and purity concerns, which is there in terms of gold in jewellery form. There is no loss of scrip etc as the RBI holds the bonds in its books in demat form.
According to RBI, investors are assured of the market value of gold at the time of maturity and periodical interest.
There is a possibility of capital loss if the market price of gold declines but the investor will not lose the gold in terms of the units he has paid for, as per the RBI.
Is there any discount on SGB?
While the central bank has not termed it so specifically, a customer who applies online through the website of the listed commercial banks will have to pay an issue price of Rs 50 per gram less than the nominal value. The payment has to be made through digital mode to avail this.
Who can invest in SGBs?
If you are a resident of India as defined under the Foreign Exchange Management Act, 1999, you can invest in SGB. Individuals, HUFs, trusts, universities, and charitable institutions can all invest in SGBs.
If you were a resident of India but have undergone a status change to non-resident, then you may hold the Sovereign Gold Bonds till early redemption or maturity.
Joint holding is also allowed for SGBs, as well as minors can invest too but the application has to be made by her guardian.
Each member of your family can buy SGBs in their names, provided they satisfy eligibility criteria.
Is there any investment limit for SGBs?
For the uninitiated, the bonds are issued in denominations of 1 gram of gold and its multiples. Minimum investment is of 1 gram, and a maximum of 4 kg for individuals and HUF and 20 kg for trusts and similar entities.
In case of joint holding, the limit applies to the first applicant.
An investor or trust can buy SGBs every year, since the maximum limit holds only for a fiscal (April-March) year basis.
What is the rate of interest for SGBs?
The bonds bear interest at the rate of 2.50 per cent per annum on the amount of the initial investment. Interest will be credited semi-annually to the bank account of the investor. The last interest will be payable on maturity along with the principal.
Are SGBs taxed? How?
Interest on the bonds are taxable. The capital gains tax arising on redemption of SGB has been exempted. “TDS is not applicable on the bond. However, it is the responsibility of the bond holder to comply with the tax laws,” as per the RBI.
Also read: Sovereign Gold Bond Series IV FY24: How are SGBs taxed? Details here
Also read: Sovereign Gold Bond Scheme 2023-24 – Series IV price fixed at Rs 6,263/gm; issues opens on Feb 12