New Delhi: Investors looking to add gold to their portfolios have an opportunity with the upcoming subscription of the Sovereign Gold Bond (SGB) Series 2023-24 Series IV, set to open on February 12, 2024. The Reserve Bank of India (RBI), acting on behalf of the central government, has announced the subscription window from February 12 to February 16, 2024, with the bonds scheduled to be issued on February 21, 2024.
Key Details:
Subscription Period: February 12 — February 16, 2024 (Also Read: Good News For Government Employees! 4% Expected DA Hike In March 2024: Reports)
Issuance Date: February 21, 2024 (Also Read: Vivo Launches X100, X100 Pro In India: Check Price, Specifications, And More)
The SGB has a tenor of eight years, offering investors the option of premature redemption after the fifth year, exercisable on the date when interest is payable.
Subscribers should note that the maximum subscription limits are set at 4 kg for individuals, 4 kg for Hindu Undivided Families (HUF), and 20 kg for trusts and similar entities per fiscal year.
Investors participating in the SGB Series 2023-24 will receive a fixed annual interest rate of 2.50 percent, payable semi-annually on the nominal value.
Pricing Mechanism:
The prices of SGBs are determined in Indian Rupees based on the simple average closing price of gold with 999 purity. This average is derived from the last three working days of the week preceding the subscription period, as reported by the India Bullion and Jewellers Association Limited (IBJA).
Tax Implications:
Investors need to be aware of the tax implications. The interest earned on SGBs is taxable under the Income Tax Act, of 1961. However, the capital gains tax arising from the redemption of SGBs is exempt for individual investors. Furthermore, long-term capital gains from the transfer of SGBs will enjoy indexation benefits.
Where To Purchase:
SGBs are available for purchase through various channels, including Scheduled Commercial banks (excluding Small Finance Banks, Payment Banks, and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognized stock exchanges such as the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.