Sovereign Gold Bond Scheme 2024 subscription window is now open - Here's how you can apply
The latest phase of the Sovereign Gold Bond Scheme for the year 2024 is now available for subscription starting today, with the window remaining open until February 16, 2024.
Issued by the Reserve Bank of India (RBI), the Sovereign Gold Bond Scheme scheme presents a lucrative opportunity for investors interested in gold. Additionally, the government has introduced a special offer for online applicants, providing a notable discount.
Subscription Period for Sovereign Gold Bond Scheme 2024
The current series of the Sovereign Gold Bond Scheme is accessible for subscription from today until February 16, 2024.
Pricing for the Sovereign Gold Bond Scheme 2024
The RBI has set the price of the sovereign gold bond at Rs 6,263 per gram.
Exclusive Online Discount
Applicants who opt to apply online or use digital payment methods are eligible for a discount of Rs 50 per gram, effectively reducing the purchase price to Rs 6,213 per gram of gold.
Interest Earnings and Tax Benefits of the Sovereign Gold Bond Scheme
The bonds carry an eight-year maturity, with an early redemption option available after five years. Investors will receive an annual interest rate of 2.50 per cent, which is subject to taxation. However, the capital gains from the redemption of the bonds are exempt from tax.
Calculating Interest on Sovereign Gold Bonds
Interest on these bonds is calculated and paid semi-annually. For example, a bond priced at Rs 6,000 with an annual interest rate of 2.5 per cent would yield Rs 150 in interest per year, accumulating to Rs 1,200 over eight years.
At the end of the maturity period, investors are paid the prevailing market value of gold, along with the accumulated interest income, all of which is tax-exempt.
Investment Caps for Sovereign Gold Bonds
The minimum investment starts at 1 gram, with a cap of 4 kilograms for individual investors. The KYC requirements for these bonds are aligned with those for physical gold purchases.
Required Documents for Sovereign Gold Bond Investment
Investors must provide KYC documentation, such as a Voter ID, Aadhaar card/PAN or TAN/Passport. A Permanent Account Number (PAN) issued by the income tax department is essential for investing in these bonds.
Sovereign Gold Bonds (SGBs) are regarded as a medium to long-term investment opportunity, featuring an eight-year term. However, investors have the flexibility to opt for early redemption starting from the fifth year. The attractiveness of SGBs is further enhanced by a fixed annual interest rate of 2.50 per cent, which is paid semi-annually, offering an edge over owning physical gold. Additionally, the profits earned upon the redemption of SGBs are entirely exempt from tax.
In recent times, SGBs have emerged as a favoured investment choice for many, primarily due to the convenience they offer in terms of eliminating the need for physical storage. Unlike physical gold, SGB holders are not subjected to any storage or maintenance fees, making it a hassle-free option.
Nonetheless, investing in SGBs carries financial risks, particularly if the market price of gold declines in the future.