SGB Series IV FY24 is currently open. Today, February 12, is the opening day for subscriptions to the newest series of Sovereign Gold Bonds. The RBI has set the issue price of Rs 6,263 per gramme of gold for the subscription of SGBs 2023-24 Series IV. If the central government doesn't terminate the programme before the allotted time with notice, the subscription period will remain open until Friday. The SGBs will be issued on February 21st.
What advantages does SGB offer?
The investor can obtain the current market price for the gold at the time of early redemption, and the amount of gold for which she paid is safeguarded. Moreover, there are no storage expenses or risks. Additionally, there are no manufacturing fees or purity issues when it comes to gold jewellery. Since the RBI keeps the bonds in its records in demat form, there is no loss of scrip, etc. Investors are guaranteed the market value of gold at the time of maturity and periodic interest, according to RBI. According to the RBI, there is a chance of capital loss if the market price of gold drops, but the investor won't lose the gold in terms of the units he has paid for.
Is SGB subject to a discount?
Customers who apply online via the websites of the listed commercial banks would be required to pay an issue price that is Rs 50 per gramme less than the nominal value, even though the central bank has not used that exact term. In order to use this, the payment must be made digitally.
With SGBs, who can invest?
You may invest in SGB if, as defined by the Foreign Exchange Management Act of 1999, you are an Indian resident. SGBs are investable by individuals, HUFs, trusts, universities, and charitable organisations. If you were an Indian resident but had your status changed to non-resident, you could keep the Sovereign Gold Bonds until they matured or were redeemed early. SGBs are permitted to hold in joint accounts, and minors are permitted to invest as well, although their guardian must submit the application. If all members of your family meet the requirements, they can purchase SGBs under their names.
Does SGBs have an investment cap?
The bonds are offered in multiples of one gramme of gold, for those who are unaware. A gramme is the minimum investment, up to a maximum of 4 kilogramme for HUF and individuals, and 20 kg for trusts and other similar institutions. The first applicant is subject to the limit in cases of joint holding. Since the maximum limit is only applicable for fiscal years (April through March), an investor or trust may purchase SGBs on a yearly basis.
What is the interest rate on SGBs?
The bonds yield interest on the initial investment amount at a rate of 2.50% annually. Semi-annually, interest will be deposited into the investor's bank account. The principle and the final interest will be due at maturity.
Do SGBs pay taxes? How?
Bond interest is subject to taxation. There will be no capital gains tax due upon SGB redemption. "On the bond, TDS is not applied. Nonetheless, according to the RBI, it is the bond holder's obligation to abide by tax regulations.
