edited by: Mohammad Haris
Last Update: March 01, 2023, 12:35 PM IST
SGB provides an option to hold gold in physical form. (Representational image)
RBI has provided the date of issue and date of submission of request for premature redemption and date of coupon payment in addition to the SGB series.
Reserve Bank of India (RBI) has fixed the dates for premature withdrawal of several tranches of Sovereign Gold Bond (SGB). In a press release, the central bank has provided the date of issue and date of submission of request for premature redemption and date of coupon payment in addition to the SGB series.
“As per Para 13 of the Consolidated Procedural Guidelines on Sovereign Gold Bond (SGB) Scheme issued by the Reserve Bank of India vide circular IDMD.CDD.1100/14.04.050/2021-22 dated October 22, 2021, premature redemption as Gold bonds are permitted after five years from the date of issue of the bond,” RBI said in the release on Tuesday, detailing the installments falling due for premature redemption during the period April 01, 2023 to September 30. Providing, 2023.
What is premature withdrawal?
Although the tenor of the Bonds is 8 years, early encashment/redemption of the Bonds is permitted after the fifth year from the date of issue on the coupon payment dates. The Bonds will be tradable on exchanges if held in demat form. It can also be transferred to any other eligible investor.
What do I have to do for premature redemption?
In case of premature redemption, the investor may approach the concerned Bank/SHCIL Offices/Post Office/Agent thirty days prior to the Coupon Payment Date. Premature redemption request can be considered only if the investor approaches the concerned bank/post office at least one day prior to the coupon payment date. The proceeds will be credited to the customer’s bank account provided while applying for the bond.
What is Sovereign Gold Bond (SGB)? Who is the issuer?
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and on maturity the bonds will be redeemed for cash. The bond is issued by the Reserve Bank on behalf of the Government of India. SGB provides an option to hold gold in physical form.
Who is eligible to invest in SGB?
Persons resident in India as defined under the Foreign Exchange Management Act, 1999 are eligible to invest in SGBs. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions. Individual investors with subsequent change in residential status from resident to non-resident can continue to hold SGBs till early redemption/maturity.
What are the tax implications on i) interest and ii) capital gains?
Interest on the Bonds will be taxable as per the provisions of the Income Tax Act, 1961 (43 of 1961). An individual is exempted from capital gains tax arising on redemption of SGBs. Indexation benefit will be provided for long term capital gains arising to any person on transfer of the bonds.
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