India announces Sovereign Gold Bond Scheme 2023-24, first tranche to open on June 19

The SGBs will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

The SGBs will be denominated in multiples of gram(s) of gold with a basic unit of One gram.

The tenor of the SGB will be for a period of eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable.

Minimum permissible investment will be one gram of gold. The maximum limit of subscription shall be 4 Kg for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal year (April-March), as notified by the government from time to time. A self-declaration to this effect will be obtained from the investors at the time of making an application for subscription. The annual ceiling will include SGBs subscribed under different tranches, and those purchased from the secondary market, during the fiscal year.

Price of SGB will be fixed in Indian rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the week preceding the subscription period. 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 redemption price will be in Indian rupees based on simple average of closing price of gold of 999 purity, of previous three working days published by IBJA Ltd.

The investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.

The interest on SGBs shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual is exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of the SGB.