Sovereign Gold Bond Subscription Opens on December 18 at Rs.6,199 per Gram; Deadline Extended Until December 22
The government is once again offering an opportunity to invest in Sovereign Gold Bonds. The upcoming series of Sovereign Gold Bond Scheme will open on Monday, 18th December, and will be available for subscription until 22nd December. The government has fixed the price of Sovereign Gold Bonds at ₹6,199 per gram during this period. By applying online and making a digital payment, investors can avail a discount of ₹50 per gram, reducing the effective price to ₹6,149 per gram. Here’s an overview of the Sovereign Gold Bond Scheme, allowing you to participate in it and earn returns.
What is Sovereign Gold Bond?
Sovereign Gold Bond is a government-backed bond that can be converted into physical gold through a demat account. The bond’s price is linked to the prevailing market rate of gold. It is issued by the Reserve Bank of India (RBI) and is available in 24 karats, representing 99.9% pure gold.
24 Karats Means 99.9% Pure Gold in Sovereign Gold Bonds
When investing in Sovereign Gold Bonds, you are essentially investing in 24 karats gold, which denotes 99.9% purity. These bonds offer a 2.50% annual interest rate on the investment. Additionally, investors can avail loans against the bonds if needed, and the price is determined based on the rates published by the Indian Bullion and Jewellers Association Ltd (IBJA). The subscription period’s last three days’ average closing price of 24 karat purity gold is considered.
No Worries About Purity and Safety in Sovereign Gold Bonds
Investors need not worry about the purity of gold when investing in Sovereign Gold Bonds. The price is aligned with the rates of 24 karats pure gold published by IBJA. Investors also have the option to hold the bonds in demat form, ensuring a secure and hassle-free investment with no associated storage concerns.
You Can Invest in More Than 4 Kilograms of Gold
Through Sovereign Gold Bonds, individuals can invest in a minimum of 1 gram and up to 4 kilograms of gold annually. For joint holdings, the maximum limit for a 4-kilogram investment applies only to the primary applicant. The Trusts can purchase a maximum of 20 kilograms.
Tax Implications if Sold After 8 Years
If you sell Sovereign Gold Bonds after holding them for a minimum of 8 years, there is no tax on the gains. However, if you sell after 5 years, you will be subject to a 20.80% Long Term Capital Gains (LTCG) tax on the profits.
Offline Investment Options Available
The Reserve Bank of India provides various options for offline investments in Sovereign Gold Bonds. Investors can apply through banks, post offices, stock exchanges, and Stock Holding Corporation of India Ltd (SHCIL). After submitting the application form, the funds will be deducted from the investor’s account, and the bonds will be transferred to their demat account. PAN card is mandatory for investment, and bonds can be purchased through major banks, SHCIL, NSE, and BSE.
120% Surge in the Last 7 Years
Since the launch in 2015-16, when the price was ₹2,684 per gram with a ₹50 discount, the Sovereign Gold Bond Scheme has seen an impressive surge. The current price is ₹5,876 per gram after the discount, reflecting an increase of nearly 120% over the last 7 years.
How to Invest in Sovereign Gold Bonds Effectively?
Ajay Kedia, the director of Kedia Commodity, suggests that investing in gold for an extended period is advisable due to its minimal volatility and the potential for higher returns. A holding period of 3 to 5 years is recommended for optimal returns, and with a mere 1-year investment, one can witness significant appreciation, with gold potentially reaching up to ₹65,000.
