India has diverse portfolio of investments. Sovereign Gold Bonds (SGBs) becomes popular in recent times. If you are a SGBs investors, this piece of news is for you. The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bonds under the 2017-18 Series IV and 2018-19 Series II tranches.
Rules And Regulations For Early RedemptionThe regulatory body and the government issued a notification regarding the premature withdrawal of bonds in 2017 and 2018. In the notification issued, the premature redemption of SGBs may be permitted after the fifth year from the date of issue. Thisis the period scheduled for interrest payments.
How Redemption Price Of SGBs Determined?The redemption price of SGBs is determined based on the average closing price of 999 purity gold over the three business days before the redemption date. For this announcement, the average closing price of gold on April 18, 19, and 22 was considered.
RBI's Announcement On Recent RedemptionLast week, the RBI facilitated the early redemption of the SGB 2017-18, Series III, at a fixed price of Rs 7,260 per unit.
Is Sovereign Gold Bond Taxable?Interest on Gold Bonds is taxable as per the Income Tax Act, 1961, while capital gains tax on redemption has been exempted for individuals. Indexation benefits will be provided for long-term capital gains arising from the transfer of bonds.
Sovereign Gold Bond Scheme: Maximum And Minimum Buying CapacityIndividuals can buy bonds worth a maximum of 4 kg in a financial year, with a minimum investment requirement of one gram.
When Was Sovereign Gold Bond Scheme Launched?The Sovereign Gold Bond Scheme, was launched in November 2015.
Certificate Of InvestmentInvestors receive a Certificate of Holding for their investment, and the bonds are eligible for conversion into demat form.
Abut Sovereign Gold Bonds(SGBsSGBs have become one of the most favored forms of gold investment, administered by the RBI on behalf of the government. These bonds offer investors 2.5 percent interest annually, with the last interest payment made on maturity along with the principal.
