Sovereign Gold Bond Scheme 2021: First Tranche Of The Issue Opens Today. Key Things To Know Before Buying

The interest on the bonds is fixed at 2.50 per cent per annum which will be credited semi-annually to the bank account of the investor.

Those who are looking to invest in gold through the bond schemes, then it’s time to subscribe to the Sovereign Gold Bond Scheme 2021-22 Series-I. The first tranche of gold bonds of this fiscal is opened for subscription from Monday, May 17 to May 21, 2021.

Gold futures on MCX jumped for the second day and breached the key level of Rs 48,000 level per 10 gram. Globally, gold rates hit a three-month high, boosted by a weaker US dollar and a dip in Treasury yields. Spot gold was up 0.6 percent at $1,852.39 per ounce.

Here’s what you should know

What’s the issue price?

The government has fixed the issue price at Rs 4,777 per gram of gold while investors who apply online and make the payment online will get a discount of Rs 50 per gram.

Who can buy?

The sovereign gold bond scheme was launched in November 2015 with an aim to reduce the demand for physical gold and divert a part of the domestic savings used in purchasing gold into financial savings.

Resident individuals, Hindu Undivided Family (HUF)s, Trusts, Universities, and Charitable Institutions are eligible to apply for the subscription of the bonds.

What’s the interest?

The interest on the bonds is fixed at 2.50 percent per annum which will be credited semi-annually to the bank account of the investor and the last interest will be paid on maturity along with the principal. According to the Income Tax Act, 1961 (43 of 1961), the interest is taxable. Note, there will be no capital gains tax on redemption of the sovereign gold bonds.

What is the latest date of the issue?

Remember, the issue date of the latest tranche of gold bonds will be May 25.

Where can you subscribe?

Sovereign gold bonds are sold through banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognized stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

What are the features of the sovereign god bonds?

The RBI issues the bonds on behalf of the government. 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 an exit option after the 5th year.  Also, note that the minimum permissible investment is 1 gram of gold. In the case of the gold held in Demat form, there is no GST levy, unlike in physical gold.