The Sovereign Gold Bond (SGB) Scheme 2021-22 - Series X opened for subscription on Monday, February 28, 2022, and will close on March 4, 2022.
The price of gold has been established at Rs 5,109 per gram by the Reserve Bank of India (RBI). There is a special discount of Rs 50, if applied online.
The government launched the Sovereign Gold Bond Scheme in November 2015 as part of the Gold Monetisation Scheme. Before each fresh tranche, RBI will issue a press release announcing the SGB rate.
As per RBI instructions “Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s)’’ as the first applicant's PAN number is required. The central bank issues the bonds on behalf of the Government of India.
According to RBI press release, "the nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period, i.e. February 23, February 24, and February 25, 2022 works out to ₹5,109/- (Rupees Five thousand one hundred and nine only) per gram of gold."
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If you want to invest in gold which is considered as ‘Safe haven’ during any turmoil, here is how to do it:
How to invest in Sovereign Gold Bond(SGB) through SBI Online
Individuals investing through this route should make sure that they have valid login ID access to your SBI net banking. If not, one should activate the net banking to proceed further.
How to register for Sovereign Gold Bond(SGB)
Step 1: Login SBI Net Bankig using credentials
Step 2: Click on ‘e-Service’ from main menu
Step 3: Click on ‘ Sovereign Gold Bond Scheme’
Step 4: You must register if you are a first-time investor. Select 'Register,' from header tab then 'Terms and Conditions,' then 'Proceed.'
Step 5: Enter all your details that are not auto-filled. Add nomination and other details.
Step 6: Choose the Depository participant from NSDL or CDSL where your demat account is held.
Step 7: Enter DP ID, Client ID and click ‘Submit’ tab
Step 8: Confirm the details and click ‘ Submit’ tab
How to buy Sovereign Gold Bond scheme through SBI
Step 1: Login SBI Net Banking using credentials
Step 2: Click on ‘e-Service’ from main menu
Step 3: Click on ‘Sovereign Gold Bond Scheme’
Step 4: Select 'Purchase,' from header tab
Step 5: Select the tab ‘Terms and Conditions’ tab and Click ‘Proceed’
Step 6: Enter ‘Subscription quantity’, nominee details
Step 7: Click on ‘Submit’
Step 8: Enter your OTP and click ‘Confirm’
In a new page you will find all the details of your SGB investments.
SGB details
The SGB will have an 8-year tenor, with an exit option starting in the fifth year that can be utilised on interest payment days. The investors will be paid a set rate of 2.50 percent per year on the nominal value, payable semi-annually. The minimum amount of gold that can be invested is one gram, and the maximum amount that can be subscribed is four kilograms for individuals, four kilograms for HUFs, and twenty kilograms for trusts and similar entities per fiscal year (April-March).
Note that the annual ceiling will apply to bonds purchased from the secondary market as well as bonds subscribed to in various tranches during the government's initial issuance.
According to SBI, here are few FAQs
1) Is there any limit set for buying the SGB?
Yes, the Minimum permissible investment will be 1 gram of gold and the Maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained.
2) Where can I buy these bonds?
Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices as may be notified and recognized stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.
3) What is the interest rate calculated for SGB?
The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.
4) What are the Tax benefits that I get after buying SGB?
The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.
5) What will be the Redemption Price for SGB?
The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity of previous 3 business days published by IBJA.
