"I think something's missing in my life... Like... 2-3 million dollars"           "Great things never came from comfort zones"           "Good, better, best. Never let it rest. Till your good is better and your better is best"           "Investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future"           "You cannot save time for future use, but you can invest it for the future you"           "Wealthy people invest first and spend what’s left and broke people spend first and invest what’s left"           "The secret to getting ahead is getting started.................Start using your Savings to Earn Money"           "The best gift, and investment, you can give your child is your time"           "Investing in your child’s education is never a wasted effort"           "Do something today that your future self will thank you for"

Sovereign-Gold-Bonds-Scheme

 

Sovereign Gold Bonds Scheme

186 views
18
See the related post: Eight ways to save Income tax
Introduction-

Sovereign gold bond shceme issued by Reserve Bank of India on the behalf of the Government of India. This is in the form of bonds not in physical gold. The value of bonds is denominated in multiples of gold grams. Investment in physical gold always remain fear of theft and incur expenses for their wear/tear for example to keep in locker, you have to pay locker rent annually. Sovereign gold bonds are safe because they are in the form of bonds not in the form of physical gold.

Any Indian Resident- for example an Individual, HUF, Trust, charitable institutions or universities can invest in sovereign gold bonds, even any person can also invest in the name of minor also. In sovereign gold bonds interest is received @ 2.50% per annum on half yearly basis on the nominal value of bonds. Pan number of the applicant is mandatory as per instruction of the Reserve Bank of India.

   
Features of Sovereign Gold Bonds-
  1. Who Can Invest- Any Indian Resident- for example an Individual, HUF, Trust, charitable institutions or universities can invest in sovereign gold bonds, even an Individual can purchase on behalf of minor or in the joint name.
  2. Maturity period- The maturity period is 8 years.
  3. Prematurity period- Premature encashment of these bonds is allowed after 5 years of issue i.e. with exit option in 5th, 6th and 7th year, to be exercised on the interest payment dates
  4. Interest rate- Interest is received @ 2.50% per annum on half yearly basis on the nominal value of bonds.
  5. Safety- Sovereign gold bonds are safe because they are in the form of bonds not in the form of physical gold.
  6. Minimum or Maximum Investment- Minimum permissible investment will be 1 gram of gold. The maximum limit of shall be 4 KG for individual/HUF and 20 Kg for trusts and similar entities per fiscal year (April-March) as notified by the Government from time to time.
  7. Payment option- Payment for purchase of the bonds can be made through cash (which is eligible to maximum of Rs. 20,000) or Cheque or Demand draft or Internet banking.
  8. Issue price:The bond price will be fixed in INR on the basis of average of closing price of gold of 999 purity published by the India Bullion and Jewelers Association for the week preceding the subscription period. The issue price of the gold bonds will be Rs 50 per gram less than the nominal value of the Sovereign Gold Bond.
  9. Form of Issuance- Government of India Stocks issue gold bonds as per the GS Act, 2006. Investors will receive a Holding Certificate for it. Investors can also convert it to demat form.
  10. Tax treatment- No capital gain tax will be charged if you hold it until maturity or say redeem it after its maturity, otherwise Long term capital gain will be taxed @ 20% with indexation benefit after 3 years of holding otherwise charged as Short term capital gain at normal slab rate. Interest received thereon is taxable.
  11. Collateral- Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
  12. Sales channel:Bonds will be sold through banks, Stock Holding Corporation of India (SHCIL), designated post offices as may be notified and recognised stock exchanges viz., National Stock Exchange of India and Bombay Stock Exchange, either directly or through agents. 
  13. Redemption price- The redemption price will be in INR on the basis of average of closing price of gold of 999 purity published by India Bullion and Jewelers Association of previous 3 working days.
  14. Know your customer (KYC) - KYC documents such as Voter ID, Adair card/PAN or TAN /Passport will be required.




Comments


Leave a Reply

Name *
Comments *
   

© 2019 - Understand Your Income