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India Launches New Series of Sovereign Gold Bond Scheme

The Series V of the Sovereign Gold Bond (SGB) scheme has opened effective today, 14th January, 2019. The scheme will be open for a period of five days and will close on 18th January. The settlement date of the new series has been fixed as January 22, 2019, said the notification published by the Ministry.

The issue price of the bond would be INR 3,214 per gram of gold. However, the Indian government, in consultation with the Reserve Bank of India (RBI), has decided to offer a discount of INR 50 per gram from issue price to those applying online and making digital payment. Accordingly, the issue price for online investors would be INR 3,164 per gram of purchased gold.

According to Indian Ministry, investing in SGB scheme offers assured interest on gold. Further, the online gold certificate in digital form eliminates the risk and cost of storing gold. The investment could be redeemed any time as per prevailing gold rates at the time of redemption. Moreover, the SGB is eligible for exemption from capital gains tax upon redemption after the 8-year maturity period.

The bonds are denominated in units of multiples of one gram of gold. Minimum investment limit is one gram, whereas the maximum purchase shall be up to 4 kilograms for individuals and Hindu Undivided Family (HUF) and 20 kilograms for trusts and similar entities. The sale is limited to resident Indians and local entities.

The SGB is aimed at curbing the demand for physical gold in the country.