What is Sovereign Gold Bond scheme and how does it work for you
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Zee Media Bureau
New Delhi: This Dhanteras, Gold buyers will have the option of purchasing Sovereign Gold Bonds.
Also read: Sovereign Gold Bonds to attract investors over other options: Report
For an easy understanding, we are highlighting the importance and benefits of this gold scheme. Here are 10 easy points to understand the Sovereign Gold Bond scheme.
Also read: Sovereign gold bond scheme may offer better returns than ETFs
- The bonds would be issued by the Reserve Bank and will offer an interest rate of 2.75 percent.
- It will remain open for public subscription between November 5-20
- The gold bond scheme will offer investors a choice to buy bonds worth 2 grams of gold, up to a maximum of 500 grams.
- The tenor of the bond will be for a period of eight years with exit option from 5th year to be exercised on the interest payment dates.
- The interest earned on gold bonds would be taxable, and capital gains tax shall be levied as in case of physical gold.
- The bonds can be used as collateral for loans and the loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
- The bonds would be tradable on exchanges and would be eligible for Statutory Liquidity Ratio.
- The bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, universities and charitable institutions.
- There would also be a commission of 1 percent on the subscription amount for distribution of bonds.
- The borrowing through gold bonds would form part of market borrowing programme of the government.
With PTI Inputs
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