This website is purely ACADEMIC in nature and NOT a stock market recommendation service or a tip provider. No live data or feeds are provided and all information is historic only. Information is provided for ease of understanding for the purpose of learning. Accuracy of definitions etc is not mantained. I am not a SEBI or IRDA registered.

Sovereign Gold Bonds

From Asuku.com
Revision as of 00:41, 20 October 2017 by Cooleo (talk | contribs) (Created page with "{{Alphabets}} The bonds are issued by the Government of India in consultation with the Reserve Bank of India. Application for purchase of the bonds are acceptable in the spe...")
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to:navigation, search
HomePersonal FinanceMutual FundsEquity

The bonds are issued by the Government of India in consultation with the Reserve Bank of India.

Application for purchase of the bonds are acceptable in the specified dates that are announced from time to time.

The Bonds will be issued on the succeeding Monday after each subscription period.

The Bonds will be sold through 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.

The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable Institutions.

The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.

The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.

Minimum permissible investment will be 1 gram of gold.

The maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchase from the Secondary Market.

In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.

Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 business days of the week preceding the subscription period. The issue price of the Gold Bonds will be ` 50 per gram less for those who subscribe online and pay through digital mode.

Payment for the Bonds will be through cash payment (upto a maximum of ` 20,000) or demand draft or cheque or electronic banking.

The Gold Bonds will be issued as Government of India Stocks under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form.

The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity of previous 3 business days published by IBJA.

Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices as may be notified and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.

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

Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.

Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.

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 bond

Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.

The Bonds will be eligible for Statutory Liquidity Ratio purposes.

Commission for distribution of the bond shall be paid at the rate of 1% of the total subscription received by the receiving offices and receiving offices shall share at least 50% of the commission so received with the agents or sub agents for the business procured through them.

Related Topic

HomePersonal FinanceMutual FundsEquity