New Delhi
The government has come out with timelines for issuance of sovereign gold bonds for the first six months of this fiscal (from April to September). According to the timeline, the bonds will be issued in six tranches until September, and will be sold through banks and designated post offices. These bonds, which will have a tenor of eight years, will be issued by Reserve Bank of India on behalf of the Government of India.
Tranche Date of Subscription Date of Issuance
2020-21 Series I April 20-24, 2020 April 28, 2020
2020-21 Series II May 11-15, 2020 May 19, 2020
2020-21 Series III June 08-12, 2020 June 16, 2020
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
10 things to know about sovereign gold bonds:
1) Sovereign gold bonds are denominated in multiples of gram(s) of gold.
2) Minimum permissible investment is 1 gram of gold.
3) The maximum limit of subscription for individuals is 4 kg. This annual ceiling will include bonds subscribed under different tranches and those purchased from the secondary market.
4) The bonds will have a maturity period of eight years but investors will have the option to exit after the fifth year. Bonds will be also be tradable on stock exchanges within a fortnight of the issuance on a date.
5) Sovereign gold bonds will continue to 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) The issue price of the bonds will depend then-prevailing price of gold. It will be calculated on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period.
7) The issue price of the gold bonds will be ₹50 per gram less for those who subscribe online and pay through digital mode.
8) The redemption price will be based on simple average of closing price of gold of 999 purity, of previous 3 working days published by IBJA Ltd.
9) These bonds can be used as collateral for loans.
10) 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.
