The Modi government is offering to buy cheap gold again from Monday 17th May. You get gold in the form of bonds, not physical ones. The first sale of the Sovereign Gold Bond for FY 2021-22 will run from Monday to May 21. Sovereign gold bonds will be issued in six installments between May and September. Under the first installment of FY 2021-22, purchases can be made between May 17 and 21 and bonds are issued on May 25.
10 highlights of the first series of Sovereign Gold Bond
1. The Modi government has reached around Rs 8500 per 10 grams at a time when domestic prices are cheap. Subscription for the first series of the Sovereign Gold Bond Scheme 2021-22 will cease after May 21, 2021.
2. The Gold Bond for this episode is Rs. 4,777 per gram. It is based on an average of 999 purity gold prices published by the Indian Bullion and Jewelers Association Limited (IBJA).
3. The Reserve Bank of India (RBI) issues sovereign gold bonds on behalf of the government. The Sovereign Gold Bond Scheme was launched in 2015 with the aim of reducing physical gold demand and transferring a portion of domestic savings to economic savings.
4. In a sovereign gold bond scheme, a person can buy a maximum of 500 grams of gold bonds during the financial year. There is a minimum investment of one gram.
5. The government has decided to issue bond in six installments from May 2021 to September 2021. The Reserve Bank of India will issue a bond on behalf of the Government of India.
6. Bonds are subject to liquidity in stock exchanges within fifteen days of issuance.
7. Investor PAN is required with every application of SGB. Gold bonds are sold through banks, stock holding corporations of India (SHCIL), designated post offices and accredited stock exchanges (NSE and BSE).
8. The key issue is that investors get the benefit of raising the price of gold. Also, they get a fixed interest rate of 2.5% on the investment amount.
9. These bonds have a maturity of 8 years and can be issued prematurely only after the 5th year.
10. It is subject to a long-term capital gains tax after three years (no capital gains tax is levied until expiration) but you can use it for debt.
