The third tranche of Sovereign Gold Bond Scheme will open for subscription from June 8. The RBI has fixed the issue price at Rs 4,677 per gramme of gold for the scheme ending on June 12. However, investors applying online and making payment in digital mode will get a nominal discount of Rs 50 per gramme.
A fixed-rate of 2.5 per cent per annum is applicable on the SGBs, payable semi-annually. Interest accruing from gold bonds scheme is taxable. However, individual investors are exempted from the capital gains arising out of redemption.
"The nominal value of the bond based on the simple average closing price for gold of 999 purity of the last three business days of the week preceding the subscription period, i.e. June 03 - June 05, 2020, works out to Rs 4,677 per gramme of gold," the Reserve Bank of India (RBI) said.
The RBI will issue Sovereign Gold Bonds on behalf of the central government. Resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions are eligible to participate in the scheme. Investors can make a minimum investment of 1 gramme, and the maximum limit of subscription shall be 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March).
Gold bonds will be sold through banks, except small finance banks and payment banks, and Stock Holding Corporation of India (SHCIL). The bonds are held in RBI books or in Demat form. The tenor of the Sovereign Gold Bond will be eight years, with exit option after the fifth year to be exercised on interest payment dates.
The government launched the scheme in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings, used for the purchase of gold, into financial savings.