Sovereign Gold Bond Scheme 2023-24 Series III will be available for subscription from December 18-22, 2023, while Series IV will be available from February 12-16, 2024
The Reserve Bank of India (RBI) on December 11, 2023 announced the dates for subscriptions to Sovereign Gold Bond (SGB) Scheme 2023-24 Series III and Series IV. Subscription to Series III will remain open from December 18-22, 2023, while Series IV will be available for subscription from February 12-16, 2024.
The issue price has, however, not been fixed. It will be determined based on the simple average of closing price of gold of 999 purity for the last three working days of the week preceding the subscription period, published by the India Bullion and Jewellers Association Ltd (IBJA), the RBI said in a press release.
The SGBs will be available through various channels, including scheduled commercial banks (SCBs) (except small finance banks, payment banks and regional rural banks), Stock Holding Corporation of India (SHCIL), Clearing Corporation of India (CCIL), designated post offices, and recognised stock exchanges, such as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Individual investors can start with a minimum investment of 1 gm and maximum 4 kg.
The know-your-customer (KYC) documentation for SGBs is the same as that for purchasing physical gold. Permanent Account Number (PAN) issued by the income tax department is mandatory.
One can pay for SGBs either through cash (up to a maximum of Rs 20,000), demand draft, cheque or electronic banking.
For investors applying online, RBI is offering a discount of Rs 50 per gram. “The issue price of the SGBs will be less by Rs 50 per gram for the investors who subscribe online and pay through digital mode,” the RBI said in its release.
SGBs offer several advantages over physical gold. It’s a cost-effective way to buy gold as there are no additional charges, such as Goods and Services Tax (GST).
Also, SGBs come with a tenure of eight years with an exit option after the fifth year. SGBs are tax free if held till maturity.
In addition, SGBs offer an annual interest of 2.50 per cent, credited semi-annually to the buyer’s bank account, with the final interest payment made at maturity along with the principal amount. Upon maturity, buyers will receive the value of gold at current market prices, and the interest income, all of which is tax-free.
SGBs can also be used as a collateral for loan. The loan-to-value (LTV) ratio will be as applicable to any ordinary gold loan, mandated by RBI from time to time.
SGBs can also be sold. However, selling them before 36 months may incur short-term capital gains (STCG) tax based on the individual’s income tax bracket. SGBs sold after 36 months will be considered as long-term capital gains (LTCG) and taxed at 20 per cent after indexation.