|Sovereign Gold Bond 2021
|सॉवरेन गोल्ड बॉन्ड 2021
Sovereign Gold Bond 2021 | Sovereign Gold Bond Scheme 2021 | Sovereign Gold Bond Buy online 2021
Launched in the month of November 2015, the sovereign Gold bond scheme of the Government of India is attracting a lot of investors. The reason behind the popularity of this scheme is the assured interest rate at the same time eliminating the risk and cost of storing gold. Purchasing Sovereign Gold bonds is quite similar to buying physical gold. However, the benefits are that there are no making charges involved and you get the interest on the amount you invest. In this post, we are going to provide you with the completed details related to the Sovereign Gold Bond 2021
Sovereign Gold Bond 2021: Objectives
The Objectives why the Government of India Introduced the Sovereign Gold Bond (SGB) scheme are given below.
- The main objective behind the introduction of the Sovereign Gold Bond scheme is to provide investors with an alternative to buy and own Gold. The scheme belongs to the debt fund category and was released in November 2015.
- Another objective of this scheme is to offer investors a safe and risk-free option to invest with good returns.
Sovereign Gold Bond 2021: Features
It is very important for an investor to completely understand the scheme before investing. Given below are the features that will help you understand the Sovereign Gold Bonds program better.
- The Sovereign Gold Bonds can be purchased through designated post office branches, stock exchanges BSE and NSE, and the Stock Holding Corporation only.
- All the Sovereign Gold Bonds are purchased with a lock-in period of eight years. However, there is an exit option after 5 years as well. It means that your investment will be for eight years but you can get your money even after 5 years under certain conditions.
- All Resident individuals, trusts, universities, and charitable institutions can invest in Sovereign Gold Bonds. However, there are many investment limits.
- The price at which the bonds are purchased is calculated by a simple average of spot rates provided by the Mumbai-based India Bullion and Jewellers Association (IBJA).
- Those who will purchase the Sovereign Gold Bonds online will get a discount of Rs. 50 per gram.
- You will also get the interest on the amount invested in the Gold bond. This investment will be at the rate of 2.50% per annum payable on a semi-annual basis. Please note that the interest earned is taxable.
- The Sovereign Gold Bond Programme was launched to curb imports of the Gold along with the monetisation Scheme. You must know that India is the second-largest consumer of Gold in India.
Sovereign Gold Bond 2021: Benefits
There are various benefits of Sovereign Gold Bonds that you should know. We are listing some of their benefits as given below.
- The quantity for which you pay is always protected.
- There is no hassle of storing physical gold. You will get the ownership of gold with any physical possession. It means there is no risk and no cost of storage.
- The capital gains tax that will arise on the redemption of Sovereign Gold Bond to an individual will be exempted. Also, the indexation advantages will be provided to long term capital gains arising to any person on transfer of bond.
- The bonds that you will buy will tradable. You can trade with them on stock exchanges within a fortnight of issuance on a date as notified by the RBI.
- You should also know that Bonds shall be transferable by the execution of an Instrument of transfer in accordance with the provisions of the Government Securities Act.
- Like physical gold, Sovereign Gold Bonds does not involves any making charge.
Sovereign Gold Bond 2021: Eligibility for the investment
Before you think about investing in Sovereign Gold Bond, you must know its eligibility. Make sure you meet the following norms before applying.
- The bonds can be sold to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable institutions.
Sovereign Gold Bond 2021: Maximum and Minimum Limit of investment
Given below are the maximum and minimum limits of investment that you should know.
- The minimum permissible investment in a Sovereign Gold bond is the value of 1 gram of Gold.
- The maximum limit for investment will be the value of 4 KG of Gold for HUF and 20 KG of Gold for trusts.
- The tenor of the Sovereign Gold Bond will be eight years. Also, note that the exit option will be given after 5 years and only on interest payout dates.
Sovereign Gold Bond Scheme 2021: Rates
- The fifth tranche of the sovereign Gold Bond (SGB) Scheme 2020-2021 opens in the month of August 2020.
- The price as per this tranche is Rs. 5334/- per gram.
- Those investors who are applying in online mode and making the payment online will get cost-benefit i.e. a discount of Rs. 50 per gram of gold. So, per gram of gold will cost you on Rs. 5284/- in case you buy the bond online.
- You must know that the 5th tranche has opened at a time when the gold prices have increased by 37% this year.
How to purchase Sovereign Gold Bonds 2021?
Those who are looking to purchase Sovereign Gold Bonds as an investment should know the process of doing so as given below.
- It is possible to buy Sovereign Gold Bonds through banks, Stock Holding Corporation of India (SHCIL), designated post offices, and recognised stock exchanges (NSE and BSE) except Small Finance Banks and Payment Banks.
- In order to purchase the Sovereign Gold Bonds, you need to approach a SEBI authorised agent.
- Once you redeem the Sovereign Gold Bonds, the corpus will be deposited at your registered bank account.
- The corpus that will be deposited at your registered bank account will be as per the current market value.
Are Sovereign Gold bonds safe?
- Yes, Sovereign Gold bonds are considered very safe for investment purpose. The value of denominated in multiples of grams of gold and considered as a substitute for Physical gold.
Things to know before investing in Sovereign Gold Bond 2021
The investors are requested to go through the following points before investing in the Sovereign Gold Bonds.
- Please note that according to the Income Tax Act, 1961, the interest that you will earn through Sovereign Gold Bond will be taxable.
- The redemption price will be given according to the average of the closing price of 999 purity of gold in the last three working days and the amount is given in Rupees.
- The long-term capital gains generated are provided with the indexation benefits are offered to the individual investor or from one person to another when transferring the bond.
- Through Sovereign Gold Bond Scheme, you get the guarantee of at least 2.50% interest on an annual basis.
- Once you complete the time period of 5 years of investment, you may trade SGBs on the national stock exchange or Bombay stock exchange, etc.
- All the banks in India also accept Sovereign Gold Bonds as security against secured loans. The loans that you will obtain will be called gold loan after setting the loan to value ratio to the value of gold.
- Sovereign Gold Bonds policy also allows you to invest on behalf of the minors.
- The SGBs are denominated in multiples of gram(s) of gold, having the most basic (smallest) unit as 1 gram.
- In case you obtain Sovereign Gold bonds in the Demat form then you may trade them on exchanges with exit route after 5 years.
- You may purchase Sovereign Gold bonds through banks, designated post offices, Stock exchanges and SHCIL. You may purchase the bonds directly or through an agent.
Sovereign Gold Bond 2021: Frequently Asked Questions
Question – 1: What is the price at which the Sovereign Gold Bonds are sold?
Answer: The price at which the Sovereign Gold Bonds are sold is based on the simple average of the closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last three business days of the week preceding the subscription period. Those investors who pay in online mode get discount of Rs. 50/- per gram.
Question – 2: What is the risk involved in Sovereign Gold Bond?
Answer: The only risk involved in the Sovereign Gold Bond is falling down of the Gold prices.
Question – 3: What is the maximum amount of Sovereign Gold Bonds that an Individual can buy?
Answer: An individual is allowed to buy SGBs of worth 4 kg of gold every year as the ceiling has been fixed on a fiscal year (April-March) basis.
Question – 4: Can a minor purchase the Sovereign Gold Bond?
Answer: Yes, the Sovereign Gold Bonds can be purchased by guardians/ parents on behalf of minors through a branch. Please note that the minor account holders are not allowed to apply for the SGBs in online mode.
Question – 5: Is it possible to buy 4Kg in the name of each member of the family?
Answer: Yes, subjected to the other eligibility criteria each member of the family can hold the bond if they satisfy the eligibility criteria for investing in Sovereign Gold Bond.
Question – 6: Where can I get the application form for purchasing Sovereign Gold Bond 2021?
Answer: The application form for purchasing Sovereign Gold Bond can be obtained via banks, Stock Holding Corporation of India (SHCIL), designated post offices, and recognised stock exchanges (NSE and BSE) except Small Finance Banks and Payment Banks.
Question – 7: Is TDS (tax deducted at source) is applicable to these bonds?
Answer: No, the TDS is not applicable to the bonds. However, it is the responsibility of the bondholder to comply with the laws of the tax.
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