The third tranche of gold bonds of this fiscal (2020-21) opened for subscription today and will close on June 12. The issue price has been fixed at ₹4,677 per gram of the yellow metal. Those applying online and making payment through digital mode will get a discount of ₹50 per gram. For such investors, the issue price of bond will be ₹4,627 per gram of gold.
Sovereign gold bonds are issued by the Reserve Bank of India (RBI) on behalf of the government. The sovereign gold bond scheme was launched in 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings - used for the purchase of gold - into financial savings.
Here are key things to know about the Sovereign Gold Bond Scheme 2020-21 Series III:
1) The issuance date of this tranche of gold bonds has been fixed on June 16.
2) Bonds become tradeable on stock exchanges within a fortnight of the issuance on a date, subject to liquidity.
3) The issue price of sovereign gold bonds is fixed based on recent closing price of gold as published by the India Bullion and Jewellers Association Ltd for gold of 999 purity. The minimum permissible investment in gold bonds is one gram of gold.
4) The RBI in April had announced that the government will issue Sovereign Gold Bonds in six tranches till September. Here are the details of other tranches of gold bonds that will be issued till September.:
Tranche | Date of Subscription | Date of Issuance
2020-21 Series IV July 06-10, 2020 July 14, 2020
2020-21 Series V August 03-07, 2020 August 11, 2020
2020-21 Series VI Aug.31-Sept.04, 2020 September 08, 2020
5) Gold bonds have a maturity period of eight years but investors will have the option to exit after the fifth year.
5) Gold bonds offer an annual interest rate of 2.50% to investors. The interest on gold bonds will be added to the subscriber’s income and taxed accordingly.
6) Capital gains, if any, at maturity is tax-free. This is an exclusive benefit available on gold bonds. Physical gold or other forms of investments like gold ETF or gold mutual funds don’t qualify for this benefit.
7) Mint had reported that the government had raised ₹1,168 crore through the May issue of sovereign gold bonds. This is the highest-ever amount mobilized by the government from the sale of sovereign gold bonds. The May issue, which opened for subscription on 11 May and closed on 15 May, was priced at ₹4,590 per unit.