Sovereign gold bonds | Fusion - WeRIndia

Sovereign gold bonds

Sovereign gold bonds

The Government of India along with the Reserve Bank of India has decided to issue the third tranche of Sovereign Gold Bonds. March 8, 2016 marks the beginning of the acceptance for applications of the bond. It ends on March 14, 2016. Once the applications are submitted, the Bonds will be issued on March 29, 2016. These Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL) and designated post offices. The finance minister has announced Sovereign Gold Bond as an alternative to purchasing gold in Union Budget 2015-16.

The Sovereign Gold Bonds are issued by RBI on behalf of the Government of India. Customer pays the required amount in rupees and they are denominated in grams of gold.

Sale of the bonds to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions is restricted.

The bonds have a minimum permissible investment of 2 grams of gold to be paid in rupees. Similarly, the maximum amount subscribed by an entity will not be more than 500 grams per person in a fiscal year.


For the year 2015-16, the interest has been fixed by Government at 2.75 % per annum. The interest is payable on a half yearly basis.

Customers can get the bonds in both demat and paper form. Bond rates are fixed based on simple average of closing price for gold of 999 purity of the previous week published by the India Bullion and Jewellers Association (IBJA).

Customers can get these bonds at Banks, Post Offices and SHCIL. The bonds have a tenure for a period of 8 years with exit option from 5th year onwards. The same KYC norms that apply for gold also apply for them. The bonds also have exemption from capital gains tax.

If any person gets long term capital gains because of transfer of SGB, then it is also eligible for indexation benefits.


Image Reference: Goodreturns

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