On Wednesday, the Finance Ministry released a statement providing important information about the first tranche of Sovereign Gold Bond Scheme 2021-22. The scheme will be available from May 17 in six tranches till September 2021. A calendar of key dates for the six tranches have been issued by the ministry.
The SGBs will be sold through Scheduled Commercial banks, Stock Holding Corporation of India Limited, designated post offices and recognized stock exchanges which are National Stock Exchange of India Limited and Bombay Stock Exchange Limited. It will be issued on behalf of the Government of India by the Reserve Bank of India which is the apex banking institution. They will be denominated in multiples of 1 gram(s) of gold and will be sold to citizens, HUFs, Trusts, Universities and Charitable Institutions.
The maturity period of these bonds will be 8 years with a period of exit at fifth year. The minimum possible investment is 1 gram of gold and the maximum limit is 4 Kgs of gold for an individual and HUFs, and 20 Kgs of gold for trusts. In case of joint holding, the investment limit will be 4 Kgs applied to the first applicant only.
The price of gold bond will be fixed in Indian Rupees on the basis of simple average of the closing price of gold of 999 purity published by the Indian Bullion and Jewelers Association Limited for the last 3 working days before the subscription date. The issue price will be 5,051 per gram less for those who subscribe online. The investors will get a fixed interest rate of 2.5 percent per annum payable semi-annually on the nominal value. The interests on the gold bond is taxable under the Income Tax act of 1961. The SGBs can also be used for collateral loans.
Here are the important dates:
|Tranche||Date of Subscription||Date of Issuance|
|2021-22 Series I||May 17 – 21, 2021||May 25, 2021|
|2021-22 Series II||May 24 – 28, 2021||June 01, 2021|
|2021-22 Series III||May 31 – June 04, 2021||June 08, 2021|
|2021-22 Series IV||July 12 – 16, 2021||July 20, 2021|
|2021-22 Series V||August 09 – 13, 2021||August 17, 2021|
|2021-22 Series VI||August 30 – September 03, 2021||August 30 – September 03, 2021|
However, according to many gold analyst, it makes no sense to invest in SGBs as the custom duties are cut. One can buy the SGBs online through SBI online banking facility.