InvestorQ : What is the schedule for the issue of Sovereign Gold Bonds in the coming six months?
Anjana Aiyar made post

What is the schedule for the issue of Sovereign Gold Bonds in the coming six months?

Khushi Patel answered.
8 months ago

The RBI has announced the detailed schedule for issue of Sovereign Gold Bonds or SGBs all the way to March 2021. At the same time, RBI has also announced the details of the first SGB issue for the second half of the year which opens for subscription next week.

For the first tranche of SGBs in the second half of FY21, the Reserve Bank of India has fixed the issue price of the tranche of at Rs5051 per gram. The subscription for this SGB issue will open on 12 October and it will close on 16 October. There will be 5 additional tranches after that. These bonds will be issued on 20 October.

SGBs are government backed securities that are denominated in grams of gold. They are issued by the central bank on behalf of the central government and the face value in terms of grams of gold is fully guaranteed by the central government, making it default risk free.

Here are some of the highlights of this tranche to know about.

· SGBs will carry an interest rate of 2.5% payable on a half-yearly basis. The SGB will have a total tenor of 8 year from the date of allotment.

· SGBs will be free of capital gains tax on gains made only if the bond is held till maturity and redeemed after the tenor of 8 years. Otherwise, it is taxed as other income.

· The minimum stipulated investment in the SGB is 1 gram and the maximum permissible limit per individual is 4 kg for individuals and HUFs and 20 kg for trusts.

· SGBs can be purchased at via commercial banks, SHCIL, designated post offices and also through the recognized stocks exchanges like the BSE and the NSE. Digital applications get a discount of Rs.50 per gram.

The subscription schedule for SGBs after the current issue are scheduled on November 9-13, December 28 to Jan-01st, January 11-15, February 1- 5 and the last tranche on March 1- 5.