What is sovereign Gold Bonds 2018?

Sovereign Gold Bonds 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 the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.

Series-I for FY 2018-19 of Sovereign Gold Bonds has been released by the Indian Government from April 16, 2018, to April 20, 2018. In the form of gold bonds, investors can purchase gold from The Indian Government.

Highlights sovereign Gold Bonds 2018

Who all are eligible? 

Resident Individuals, HUF (Hindu Undivided Family), trusts, universities, charitable institutions, etc.

When should you apply? 

16^th April 2018 to 20^th April 2018

Rate per bond sovereign Gold Bonds 2018:

 Rs 3114 but there is a discount of Rs 50 per gram to those investors who apply online. Payment against the application is made through digital mode Rs 3064.

Sovereign Gold Bonds 2018 rate of Interest :

2.50% per annum that is payable every six months in the bank account.

Sovereign Gold Bonds 2018 Minimum Limit of Investment :

A user can buy a minimum of 1 Sovereign Gold Bond

Issue Date of sovereign Gold Bonds 2018:

 Sovereign Gold Bond issued by the government of Indian on May 4^th 2018

Maximum Investment Limit By Sovereign Gold Bond:

A user can buy 4000 bonds per individual/Hindu Joint Family.

Tenure Period of Sovereign Gold Bond :

Eight years but early exit possible from fifth year onwards interest payment dates.

Where can I purchase Sovereign Gold Bond ?

users can buy Sovereign Gold Bond from Banks, designated post offices, and stock Holding Corporation of India.

How to apply for Sovereign Gold Bond ?

The user can be downloaded Application form RBI website or from respective banks and even from your Demat Accounts.

What are the documents required to buy Sovereign Gold Bond ?

Users are requested to submit any of following documents Voter Id, Aadhar Card, PAN/TAN/Passport

Which Mode of Payment to buy Sovereign Gold Bond ?

Demand Draft, Cheque or electronic payment. Cash payment can be done only up to Rs 20000.

Is Joint Holdings Possible buy Sovereign Gold Bond? 

Yes, as the maximum limit applies to holder only.

Can I invest in the name of a minor? 

Yes, as a parent/guardian you can.

Redemption Pricing for Sovereign Gold Bond 

That’s based on the previous week average price of closing price of gold of 999 purity as per India Bullion and Jewelers Association Ltd.

Is Sovereign Gold Bond is permitted for Loan?

Collateral bonds are permitted. The loan to value is no different from real gold.

Listing of Sovereign Gold Bond

Bonds are listed on stock exchange and is sold/bought through a Demat account.

Taxation of Sovereign Gold Bond:

3 parts of Taxation are there. They are:-

• The interest received is added to income and is taxed at the marginal tax slab. There isn’t any Tax Deducted at Source (TDS) on interest.
• Gains on redemption If the bond exempted from capital gains tax. This means no tax would be payable on the profit if the subscriber redeems the bond after five years.
• If the bonds are sold, any gains would be capital gains like physical gold and are taxed accordingly. If within 3 years of purchase, the bonds are sold, its short-term capital gains is taxed at marginal tax rate. If the sale is after 3 years its long-term capital gains are taxed at 20% with indexation benefit.

So, why am I supposed to buy Sovereign Gold Bond?

Various benefits are there from investing in Sovereign Gold Bond. They are:-

1. Available not only in paper format but also as Demat.
2. Secured storage of physical gold demands risk and cost which is eliminated.

• Hidden charges are non-existent.

1. You don’t have to worry about the purity of gold.
2. During redemption, Government backs surety of market value of gold along with timely interest payout.
3. Can be used as collateral for getting a loan.

Those having long-term investment plan find a considerable option in SGB.

This is the review of Sovereign Gold Bond and its purchasing in April 2018. For more details, visit www.moneymindz.com or give a missed call to 022-62116588. 

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