Sovereign Gold Bond (SGB) Scheme 2018-19: Issue date, eligibility, how & where to buy gold bond

The Government of India launched Sovereign Gold Bond (SGB) Scheme in November 2015. The objective of the scheme is to reduce the demand for physical gold and use domestic savings for national financial savings. Under the scheme people who purchases gold as savings can purchase gold bonds instead of physical gold.

Sovereign Gold Bonds 2018-19: Issue / Subscription Dates

SGB issue 2018-19 has started and gold bonds will be issued by the RBI every month between October 2018 till February 2019.

Tranche Period of Subscription Date of Issuance
2018-19 Series I October 15-19, 2018 23 October 2018
2018-19 Series II November 05-09, 2018 13 November 2018
2018-19 Series III December 24-28, 2018 1 January 2019
2018-19 Series IV January 14–18, 2019 22 January 2019
2018-19 Series V February 04-08, 2019 12 February 2019

What is Sovereign Gold Bond (SGB) Scheme? Sovereign Gold Bond (SGB) is an alternative to the physical gold. Those who buy gold for savings can buy gold bonds instead of physical gold. Its safe government provides interest rate of 2.5% along with tax benefits.

Why should you purchase Sovereign Gold Bond (SGB) instead of physical gold:

  • Most of the gold in India is imported from foreign countries
  • India spends most of its precious foreign exchange reserve in purchasing gold due to huge demand for gold in India
  • Most of the people in India purchase gold as savings in form of gold biscuits and very few use it
  • Since most of the gold is purchased for savings people can buy Sovereign Gold Bond (SGB) instead and still save
  • Per unit price of the gold bond is equal to the market price of the gold
  • Gold bonds can be redeemed in cash on maturity

Sovereign Gold Bond (SGB) Benefits:

  • Save inform of SGBs instead of physical gold
  • Government provides good interest rate on the SGBs
  • Government also provide tax benefits on SGBs
  • Don’t have to worry about loss or theft also

SGB eligibility or who can buy gold bonds?

  • Individuals
  • Trusts
  • Universities and
  • charitable institutions

Who issues gold bonds (SGBs)? Reserve Bank of India (RBI)

Where to buy Sovereign Gold Bonds:

  • Post offices
  • Banks
  • Stock Holding Corporation of India and
  • Stock exchanges NSE and BSE

Minimum & maximum investment in SGB:

  • Minimum one gram i.e. one unit
  • Maximum of 4 kilogram for individuals and 20 kilograms for trusts per year

 SGB maturity period:

  • SGBs matures in 8 years
  • Investor can exit bonds in fifth, sixth and seventh year on interest payment dates

SGB interest rate:

  • Government provide interest rate or 2.5% on SGBs
  • The interest will be paid semi-annually

SGB Tax Benefits:

  • Capital gains tax is not applicable on redemption of gold bonds
  • Investment in SGB is taxable under income Tax Act, 1961 (43 of 1961)

Documents required for SGB purchase:

  • Know your customer (KYC) document (Voter ID, Aadhaar card/PAN or TAN /Passport)
  • PAN number

Sovereign gold bond issue price:

  • The price of the gold bond is decided by the India Bullion and Jewellers Association (IBJA)
  • The price is fixed on average closing gold prices for last three working days

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