Fiddich Review Centre

Last chance to buy RBI’s gold bond in 2022. Should you invest?

The next tranche of Sovereign Gold Bond Scheme 2022-23 will open for subscription today for five days. The issue price has been fixed at 5,409 per gram of gold. The RBI issues the bonds on behalf of the Government of India.”The nominal value of the bond…works out to 5,409 per gram of gold,” the RBI said. 

Where can you buy SGB?

The SGBs will be sold through Scheduled Commercial banks (except Small Finance Banks, Payment Banks and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and stock exchanges — NSE and BSE.

Discount for online buyers

Government of India, in consultation with the Reserve Bank of India, has decided to offer a discount of 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

“For such investors, the issue price of Gold Bond will be 5,359 per gram of gold,” RBI said.

Next chance to buy SGB

The Sovereign Gold Bonds (SGBs) 2022-23 Series IV will open for subscription during March 06-10, 2023, the finance ministry had said on Thursday.

Tenor of gold bonds

The tenor of the bonds will be for a period of eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable.

Why you should opt for SGB?

Experts believe that investing in SGBs is considered to be a better option than investing in physical gold or digital gold. The scheme is backed by the Government of India and regulated by the RBI. The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.

Tax on Sovereign Gold Bonds (SGBs)

SGBs have different taxation rules. The capital gains one makes from SGBs, if held till maturity, are tax-free. However, investors can prematurely redeem SGBs after five years. If you redeem SGBs between five to eight years, the gains are considered long-term capital gains. It is taxed at 20.8% (including cess) with the indexation benefit.

Investors can buy and sell Sovereign Gold Bonds over the stock exchange. If SGBs are sold before three years, the capital gains are added to the investor’s income and taxed based on the applicable income tax slab. Moreover, the capital gains earned by investors on selling SGBs over the stock exchange after three years are long-term and taxed at 20% with indexation benefit.


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