RBI Sovereign Gold Bond Scheme– There is good news for all the investment seekers of India who are waiting for the investment schemes of the government. For the second half of FY2021-2022, the Reserve Bank of India has issued the calendar for the Sovereign Gold Bond Scheme, 2021-2022. From October 2021 to March 2022, the Bonds will be available for purchase in four tranches. The Sovereign Gold Bond Price 2021 is Rs. 4,765 per gram. If you go for an online subscription, There is a discount of Rs. 50 Per gram.
In this article, we are going to discuss what is Sovereign Gold Bond scheme is, is it good to invest in Sovereign gold bonds, the Sovereign gold bond calculator, and Sovereign gold bond returns, and all other related details.
The RBI has changed its previous policy of only issuing one bond per month and declared Sovereign Gold Bond Scheme 20222. Now, in the scheme, there will be only four sovereign Gold bond offerings in the next six months that are October, November, January, and December.
Date of Subscription
Sovereign Gold Bond Scheme 2021 22 Series 4
October 25th to October 29th, 2021
2nd November 2021
Sovereign Gold Bond Scheme 2021 22 Series 5
November 29th to December 3rd, 2021
7th December 2021
Sovereign Gold Bond Scheme 2021 22 Series 6
January 10th to January 14th, 2022
18th January 2022
Sovereign Gold Bond Scheme 2021 22 Series 7
February 28th to March 4th, 2021
8th March 2022
Why should I Invest in RBI Sovereign Gold Bond (SGB) Scheme?
Investment in Gold is considered one of the best investments as there are very few chances of losses. If you invest in Sovereign Gold Bond India Scheme, at the time of maturity or redemption, you are entitled to get the prevailing prices of Gold. Know how to buy the sovereign gold bond from Zerodha. Not only this, you will also get an interest of 2.5% over annum which will be calculated on your investment value. For your guidance, we are going to discuss an example.
Suppose, you purchase 10 units of Sovereign gold bond or we can say 10 SGBs which are priced at Rs. 4000 per Unit ( 1 Unit = 1 Gram). In this way, you will pay a sum of (4000*10) 40000 Rs./-.
You also earn interest @2.5% per annum on the total purchase amount. In this way, you will get Rs.500 every six months until the maturity of the bond.
At the time of redemption or maturity, you are entitled to get the prevailing price of 10 grams of gold Plus the interest.
If at the time of maturity or redemption, the prevailing price of gold is Rs. 5000 per gram, you will be entitled to receive (5000*10) Rs.50000/- according to the above example.
If at the time of maturity or redemption, the prevailing price of gold is Rs. 3000 per gram, you will be entitled to receive (3000*10) Rs.30000/- according to the Sovereign Gold bond calculator.
Key Features of Sovereign Gold Bond Scheme (2020-21)
The Minimum and maximum investment subscription limit is 1 Bond (1 gm of Gold) to 4 KG of gold (4000 SGBs) per financial year.
Eligible person – Resident Individual, HUFs, Trusts, Universities, and Charitable Institutions.
You must have a brokerage account to apply for a subscription to Sovereign gold bond SBI.
The NRIs (Non-resident Indians) are not eligible to apply for Sovereign Gold Bond Scheme (2020-21).
The interest of 2.5% is earned on a semi-annual basis.
The subscription price is based on the three-day simple average closing price of 999-purity gold, as provided by IBJA (Preceding the week of issuance).
Your gold investment will be redeemed at the prevailing gold price. Physical gold will not be returned to you.
The redemption/ maturity price will be computed in the same way.
There is no credit risk as these bonds are guaranteed by the government.
Only the price value of gold will affect the amount of your investment.
The Sovereign Gold Bonds will be traded on both the BSE and the NSE.
You can also exit the secondary market before the maturity of the bond.
You can also use these bonds for secure loans just like Jewellery and other physical Gold.
You can also visit RBI Official Website for more details such as Sovereign gold bond benefits and Sovereign Gold bond Price history.
How to buy Sovereign Gold Bonds (SGBs)?
If want to know Sovereign gold bonds how to buy online, You can buy Sovereign Gold Bonds (SGBs) in two ways:
Directly From RBI (Primary Market)/ how to buy a sovereign gold bond from Zerodha
You can apply for Sovereign Gold Bonds through your bank, your broker, or the website of RBI as the RBI releases new issues on a regular basis.
2. Secondary Market
You can also buy these bonds from the secondary market if you have a Demat and trading account as these bonds are also listed on the secondary market.
If you want to exit or redeem Sovereign Gold bond investment, here are some important points you must know:
The maturity period of these bonds is 8 years. However, you can redeem these bonds after 5 years of issuance.
You can redeem Sovereign Gold Bond investment after 5 years at every 6 months intervals such as 5 years, 5 years 6 months, 6 years, 6 years 6 months, 7 years, 7 years 6 six months, and 8 years.
At the time of maturity, you are entitled to receive the prevailing price of gold plus the earned interest.
Tax charge on Sovereign Gold Bonds
Sovereign Gold Bond interest income is taxed at your slab rate. Capital gains on Sovereign Gold Bonds are taxed in the same way that they are on actual gold. Here are two ways of Sovereign Gold Bonds tax.
If you sell Sovereign Gold Bonds in the secondary market before the three-year holding period is up, the proceeds are considered short-term capital gains and are taxed at your marginal rate.
If you sell Sovereign Gold Bonds in the secondary market after three years (holding period), the proceeds will be considered long-term capital gains and will be taxed at 20% after indexation.
On redemption or maturity, there is no capital gain tax for the individual investors (Section 47 of the Income Tax Act).
If you purchase SBG at Rs 4000 per gm and redeem it with RBI at Rs. 6000 per gm after 8 years. There will be no capital gains tax to pay. Also, there would be no tax levied on the redemption after 5 years as well.
To Align SGB taxes with that of actual gold
When it comes to real gold, you can keep it for as long as you like and avoid paying capital gains tax. Sovereign Gold Bonds have an 8-year maturity. Capital gains taxes on redemption would have been a barrier. Therefore, this clause has been introduced. When the SGB matures, you can use the funds to buy another gold bond or physical gold.
How is a gold bond sovereign issued?
The RBI issues Sovereign Gold Bond through banks (except small finance banks and payment banks), The stock holding Corporation of India Limited (SHCIL), authorized post offices, and the national stock Exchange of India Limited and BSE.
How Sovereign gold bonds are allotted?
The issuance price must be paid in cash, and the bonds must be redeemed in cash at maturity. The bond is issued by the Reserve bank of India on behalf of the Indian government.
Can I buy Sovereign Gold Bond without demat account?
Yes, you can buy sovereign Gold Bond without Demat account.
How do I check my Gold Bond Sovereign balance?
You can check the SGBs balance using CDSL’s EASI Portal.