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hariputra · 1 year

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What are Sovereign Gold Bonds?

Sovereign Gold Bonds (SGBs) are a financial instrument issued by the Government of India as a means for individuals to invest in gold without owning physical gold. These bonds were introduced by the Reserve Bank of India (RBI) on behalf of the Indian government. Here are the key features and details of Sovereign Gold Bonds:

Government-backed: SGBs are issued by the Government of India, making them a safe and secure investment option. They are backed by the sovereign guarantee, which means that the government ensures the repayment of the principal amount at maturity.

Denominated in grams of gold: SGBs are denominated in grams of gold, which means investors know exactly how much gold they will receive at maturity. The minimum and maximum investment limits are specified in grams.

Fixed interest rate: SGBs offer a fixed rate of interest on the initial investment amount. The interest is paid semi-annually, and the rate is announced by the government before each tranche of bonds is issued.

Tenure: The tenure of Sovereign Gold Bonds is typically 8 years, with an option to exit after the 5th year. However, these bonds can be traded on stock exchanges after a certain lock-in period.

Liquidity: After the lock-in period, SGBs can be traded on stock exchanges, providing liquidity to investors who want to exit their investment before maturity.

Tax benefits: SGBs have certain tax benefits. The capital gains tax on redemption is exempt if the bonds are held until maturity. Additionally, the interest income from these bonds is taxable under the Income Tax Act, but it is eligible for indexation benefits.

Nominal and real returns: SGBs provide returns in two ways: the fixed interest rate and the potential for capital appreciation if the price of gold rises during the investment period. This can provide both nominal and real returns to investors.

Collateral for loans: SGBs can be used as collateral for obtaining loans from banks and other financial institutions.

Redemption and premature exit: Investors can redeem the bonds at the end of the tenure (8 years) or on specified early redemption dates. These early redemption dates are typically on the 5th, 6th, and 7th years from the issue date. Early exit is subject to a capital gains tax if sold before the 5th year.

Issuance: SGBs are typically issued in multiple tranches throughout the year. Investors can apply for them through banks, designated post offices, or via online platforms during the specified subscription period.

Sovereign Gold Bonds offer an attractive way to invest in gold for individuals who want to diversify their investment portfolio and earn returns on their gold holdings. However, it's essential to understand the terms and conditions associated with these bonds, including the lock-in period and tax implications, before investing.

#sovereign gold bonds

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remitanalyst · 1 year

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What is the Sovereign Gold Bond Scheme by RBI, and How to Invest in It?

Sovereign Gold Bond (SGB) schemes represent a government-backed initiative where gold serves as the underlying asset for these securities. They serve as an attractive alternative to physical gold ownership. Investors are required to make a cash payment at the time of issuance, and upon maturity, they receive the redemption amount in cash. The Reserve Bank of India (RBI) administers the issuance of these bonds on behalf of the government.

Advantages of the Scheme Investors benefit from the protection of the value of the gold they purchase, as they receive the prevailing market price upon redemption or premature redemption. SGBs offer a more secure option compared to storing physical gold, reducing associated risks and expenses. At maturity, investors are assured of receiving the market value of gold along with monthly interest. Importantly, SGBs do not carry the typical complications associated with gold jewelry, such as wastage and making charges.

Eligibility SGBs are open to Indian residents, including individuals, trusts, Hindu Undivided Families (HUFs), universities, and charitable institutions. Individual investors who change their status to Non-Resident Indian (NRI) can continue to hold their SGBs until maturity or redemption.

Scheme Tenure SGBs have an initial 8-year term, with investors having the option to exit in the fifth, sixth, or seventh year.

Joint Holding The RBI permits joint holding of SGBs.

Minimum and Maximum Investment Limits Individuals can invest a minimum of one gram and a maximum of four kilograms. The minimum investment is consistent across all entities, but for HUFs, the maximum limit is four kilograms, and for trusts and similar entities, it is twenty kilograms. In cases of joint ownership, the limit applies only to the primary applicant. The annual investment ceiling encompasses bonds subscribed to during the government's initial issuance and those acquired in the secondary market. Investments made as collateral with banks and other financial institutions are excluded from this limit.

Redemption Amount Upon maturity, Gold Bonds are redeemed in Indian Rupees, with the redemption price based on the average closing price of 999 pure gold over the preceding three business days, as reported by the India Bullion and Jewellers Association Limited. Interest and redemption proceeds are credited to the customer's specified bank account. Investors are notified one month prior to the bond's maturity. Any changes in account details or contact information must be promptly communicated to the bank/SHCIL/Post Office.

Premature Encashment Despite the 8-year term, early withdrawal is possible on coupon payment days starting from the fifth year of issuance. Bonds can also be transferred to another eligible investor. Requests for early redemption should be made to the relevant bank/SHCIL office/Post Office/agent at least thirty days before the coupon payment date. RBI considers early redemption requests only if the investor visits the respective bank or post office at least one day before the coupon payment date. The redeemed funds are deposited into the customer's designated bank account as specified during the initial bond application.

Risks There is a risk of capital loss if the market price of gold declines. However, investors retain ownership of the gold units they have purchased.

Bond Pricing The principal amount of Gold Bonds is denominated in Indian Rupees, determined by the simple average of the closing price of 999 purity gold announced by the India Bullion and Jewelers Association Limited during the last three business days of the week preceding the subscription period.

Tax Implications Interest earned on the bonds is subject to taxation. Capital gains tax on SGB redemption has been waived. Long-term capital gains resulting from bond transfers are eligible for indexation benefits. TDS (Tax Deducted at Source) does not apply to the Bond, but bondholders are responsible for complying with tax regulations.

Application Process Customers can apply online through the websites of scheduled commercial banks, listed below. For online applications with digital payments, the Gold Bond price is discounted by Rs. 50 per gram from the nominal value. Application forms are available at issuing banks, SHCIL offices, designated Post Offices, and through agents. Additionally, they can be downloaded from the RBI's website. Some banks also offer online application services.

In conclusion, the Sovereign Gold Bond scheme represents a secure and low-risk investment opportunity designed to offer investors the prospect of substantial returns. For those seeking financial stability and future investment potential, this scheme should be a consideration.

#SelfImprovement #WorkLifeBalance #Productivity #TimeManagement

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finance76 · 1 year

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Reasons to invest in Sovereign Gold Bonds

Indians are the highest consumer of gold after China. The penchant for gold is multidimensional in Indian households. It is considered a status symbol and represents generational wealth. This makes it the ideal choice or ornament for possession and investment purpose. Despite the demand, India does not have many gold reserves, ironically. The supply is satiated through imports. As a result, it affects the macro fundamentals of the economy.

This consecutively affects the currency. The Indian government proposed the issuance of Sovereign Gold Bonds to address this issue. The Reserve Bank of India issues it periodically at the ongoing gold price. You can make an SGB application for a minimum of a gram and multiples. Investing in such precious metals is an intelligent way for future gains. Let us understand why this investment approach makes sense:

Affordable

When you buy and sell jewellery physically, you incur making charges. You need to pay them each time you change the gold form. Another alternative is holding them as bars and coins. However, you may incur costs related to storage, Insurance, safety, etc. These issues get eliminated with Bonds. You could hold them as share certificates or in your Demat Account.

Tax-efficient

Gold is a non-financial asset. Hence, you may need to pay short-term capital gains tax when you sell it within three years. If you sell it after three years, it is classified as long-term capital gains. Hence, you get taxed at 10% without indexation or 20% with the indexation benefit. You also need not go through such taxation when you hold gold as Government Bonds.

In such a case, it comes with an eight-year tenure and is redeemable after five years. However, you attract capital gains at the actual rates when you sell SBGs in the secondary market.

Collateral usage

Gold is an excellent way to acquire credit. It was used as an asset for pledging security. The same is possible with gold Bonds traded today. They are collateral, and the Loan-to-Value ratio is like ordinary Gold Loans. The Reserve Bank of India prescribes this often. However, granting such credit against SGBs is up to the discretion of financial institutions. Ensure to check its availability.

Interest-bearing

No regular assured income exists when gold is held physically or as Exchange-Traded Fund. You only gain when the gold market price of gold is high. Contrarily, types of Bonds dealing with gold pay an annual interest of 2.5% to investors. If the gold prices go up, you gain from the price appreciation. Also, there are no risks as the Indian government regulates interest payments and principal redemption.

#Sovereign Gold Bond #bonds

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gallerialohiyas · 2 years

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Best ways to invest in Gold

India is one of the largest consumers of gold. You know, Indians have the most of gold in the world. Gold is one of the most coveted metals in India. From engagement to anniversary to birthday, Indians have been buying and stacking gold for centuries. It is considered a symbol of prosperity, purity as well as stability in the Indian Culture.

Considering increasing prices of gold over the last several years, gold has become an excellent medium of investment. Gold is a perfect investment medium, Which can give you a good profit in the future. Today, we have different ways of owning gold, such as physical and paper. You can buy gold physically in the form of Jewelry, Coins, and Bars. The paper gold is, ETFs (Exchange-traded funds), Gold Bonds, etc.

Some of the investors prefer to investing or purchasing Gold in a physical form such as in the form of Gold jewelry, Coins, and Bars. The main advantage of buying physical Gold is that they can touch, seen, and feel his Gold.

Here are some of the best way to invest in Gold:-

1. Gold Jewelry - Nowadays, there are lots of Gold investment plans are available in the market. However, in India, Mostly, people prefer to invest in solid gold by buying gold jewelry. One of the best things to invest in gold jewelry is, you can wear it.

2. Gold Coin Scheme - It is one of the best options to invest in physical gold. You can buy silver coins and bars from Jewelers, Banks, Jewelry or e-commerce websites and any finance company. However, Banks and financial companies assured of quality, but a jeweler also guarantees of quality and purity, as well as it could offer you lower price compare to banks. An authorized jeweler offers you Gold Cons & Bars with 24 karat purity and 999.0 fine gold. With the lifetime money-back guarantee.

3. Gold ETF - ETF's (Exchange-traded fund) is one of the best and secure way of making a profit on gold. It is an open-ended mutual fund scheme based on the ever-fluctuating cost of gold. We know that physical gold doesn't generate income, and the making charges are also high. ETFs gives you the dual benefit of stock trading as well as gold investments. The one Gold ETFs units equal to 1 gram gold. Its works like a stock and backs 99.5% gold purity. There are many benefits to choosing EFT over physical gold if you want to make extra profits. Some of them are listed below: No hassle of finding genuine brokers, purchasers or sellers. It is considered as long-term capital and does not attract wealth tax. It saves you money since there will be no VAT, sales tax, premiums, etc. They can also be used as collateral if we need to raise funds using it. There is one limitation to ETF but is considered a minute when you regularly invest and divest in gold. For ETF’s, you should have a Demat account, and it may attract nominal fees based on the brokerage firm or financial institution you choose.

4. Gold Savings Schemes - An alternate way of investing in Gold. In which, you will deposit a fixed amount every month the chosen tenure on the end of the term. You can buy Gold from the jeweler, Equal to your total deposit amount. The jewelers give you different types of advantages like If you are investing in one-year schemes. The most of jewelers, add a month's installment at the end of the tenure as a cash incentive or may even offer a gift item. Or they can add half of the amount as an incentive in the last installment.

5. Sovereign Gold Bond(SGB) - Sovereign Gold Bonds or SGBs is another way of owning paper gold, which is issued by the government of India. You can buy it from Banks and Post offices. The term of an SGBs is usually eight years, with a lock-in period of 5 years. It gives you two types of investing benefits; Firstly, investors earn interest at 2.5% per annum on the amount financed in SGBs. The interest income taxed at applicable slab rates. Secondly, if the investor holds the SGB for the entire term of 8 years, the resulting capital gains are entirely tax-free, which makes SGBs an ideal option for investors looking to invest in gold for a long time and enjoy tax benefits on their profits.

6. E-Gold- One of the best option to invest in paper Gold. You can invest in E-Gold just as you invest in shares. In 2010, The National Spot Exchange (NSE) launched e-gold in India, for those investors who wish to invest in gold. The most significant benefit of investing in E-Gold is, it allows you to invest in gold with very lower values than physical gold. For invest in E-Gold, you should have a Demat Account. After open Demat account, you can easily invest in E-gold, and you can take physical delivery of the gold at any time by redeeming e-gold units to your Demat account.

To know more you can visit their official website https://lohiyasgalleria.com/.

#Best ways to invest in Gold #invest in gold #ways to invest in gold #invest #where to inve

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finanzwealth · 2 years

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Sovereign Gold Bond are better than holding Physical Gold because they : * Investors would get a 2.50 per cent interest on the amount of initial investment -will be payable every six months. * Have no Risk and No Cost of Storage. * Assure of Prevailing Market Value of gold at the time of Maturity Plus earn Periodical Interest. * Have No making Charges or Purity Issue. * Are eligible as Collateral for Loan just life Physical Gold. * Are held in the books of RBI or are held with Depositories. Issue date – June 20th to June 24th , 2022 Issue Price – Rs. 5,041/- PG * Sovereign Gold Bonds are Government Securities denominated in gram of Gold * Issue by Reserve Bank of India (RBI) on behalf of government of India * Minimum Investment in the bond shall be one Gram and with the maximum buying limit of 4 kgs per person per fiscal year ( April –March ) * Besides, they can also avail capital gains at the time of redemption, in case the gold price at the time of redemption is higher * Investors will receive the ongoing market price at the time of redemption/premature redemption * Tenure is 8 years with an exit option from 5th year onwards. …Buy Your Digital Gold with Finanz Wealth! FINANZ WEALTH Plan's recommends to invest- Insure, based on your financial goals & risk appetite. Finanz wealth offer Mutual Fund Investments, Life, Health, Motor & Travel Insurance. Best Regards, For more details, feel free to contact us: ASHISH DOSHI | VEDIKA DOSHI FINANZ WEALTH Your Preferred Wealth & Risk Manager +919022937373 | +919920476588 [email protected] https://wa.me/919022937373 https://wa.me/919920476588 Ps - We are AMFI & IRDA registered mutual fund distributor & Insurance Advisor respectively. Mutual funds are subject to market risks read all scheme related documents carefully. Insurance is a subject matter of Solicitation. #SGB #gold #bond #goldbonds #sovereigngoldbonds (at Mumbai, Maharashtra) https://www.instagram.com/p/CfB5QxwNGn0/?igshid=NGJjMDIxMWI=

#sgb #gold #bond #goldbonds #sovereigngoldbonds

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bondsinvest · 3 years

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What is Sovereign Gold Bond scheme?

The History of Gold

Currency notes globally used to be backed by actual gold 50 years ago! In current times, as people get more disillusioned by the paper money being printed by nations to pump liquidity in global markets, gold as storage of value and investment becomes important. India is the biggest consumer of gold in the world and in 2020-2021 alone we imported INR 2.5L crore (~US$ 34 bn).

However, STOP buying physical gold as a form of investment and storage of your wealth when you can buy Sovereign Gold Bonds instead!

Buy Sovereign Gold Bonds (SGBs)

Gold Bonds are government securities issued by the Reserve Bank of India (RBI) and are backed by the Government of India by actual physical gold that it owns. The price of the SGBs is directly linked with price of physical gold. This is a security issued mostly for retail investors and includes applications by HUF/trusts. In a single year, an individual or HUF can apply for a minimum of 1 gram and a maximum of 4 kg in gold bonds. For entities, trusts and corporations, however, the maximum threshold increases to 20 kg. SGB also pays an annual interest of 2.5% and issued for a tenor of 8 years.

Individuals can invest in SGBs and hold it in their demat account without facing the burden of investing in physical gold.

The RBI introduced SGBs under the Gold Monetization Scheme in 2015. The RBI announces the issue of these bonds in a press release and investors can only purchase these bonds within a one-week window almost every month.

What are the benefits of Gold Bonds?

Lowest risk - SGBs are issued by the RBI on behalf of the Government of India. This is the lowest financial risk possible as your money is assured by the government itself.

No storage hassle - Physical Gold has issues with storage and safety. It also needs guarding against potential theft plus concerns with transportation. SGBs on the other hand are in your demat account in the form of digital security.

Additional Interest income - Physical gold is a ‘dead’ investment since it earns you only potential capital gains. SGBs on the other hand get you capital gains as well as pay you interest of 2.5% annually without any TDS. So, if you keep your bonds for 8 years, you have made 20% more versus physical gold!

Zero capital gains tax - As the bond pays the underlying price of gold in 8 years at redemption, there are zero capital gains tax on any gains that you make due to gold appreciation. This is not the case for physical gold and therefore is a huge advantage!

Liquidity/transferability - Sovereign gold bonds can easily be bought online and even transferred to someone else. Since they are listed on the exchange, you can even trade them in the secondary market. This is not the case with physical gold

Loan Collateral - You can easily use your SGB as collateral and take a loan upto 75% of its value usually. IndiaBonds is happy to facilitate this for you.

Stable Investment - Gold prices are less reactive to market fluctuations and therefore, they’re a relatively stable and secure investment.

Investing in Sovereign Gold Bonds with IndiaBonds

IndiaBonds makes it easier for investors to buy Sovereign Gold Bonds online. Invest from the comfort of your living room!

- It’s easy, convenient and hassle free - Get Rs 50 as discount on your transaction - Simplified payment methods - Get Assistance from experts in case of queries

Invest in just 3 simple steps :

Select - Go online on indiabonds and select the amount you want to invest

Verify - Do a simple KYC for identification purposes and link your demat and bank accounts.

Online payment - Make your payments using established online payment portals and book your gold bonds! Sovereign Gold Bonds are really a gift given all the advantages and ease of investment. It’s time to invest on you own or even gift it to your loved ones!

Gold Facts : Were you aware of some of these interesting facts on the yellow metal?!

- In early civilizations it was signified as a sign of power, beauty and even immortality.- Gold doesn’t ever corrode, rust or oxidize- You cannot burn gold- It retains its shine and purity even if its’s placed in water for years- It is malleable (can be melted), transformed into different shapes and is easy for transportation- Gold was used as a medium of exchange for international trade as early as 1500 BC by Egyptian empire- Use of gold coins as monetary system was wide at the height of Roman empire in 50-150 AD- Most of the modern world nations continued to use gold for global trade and store of value in 20th century until 1976 when US stopped backing their currency with gold (Bretton Woods accord) and hence started the use of paper money- Gold melts only at 1,064 degrees centigrade temperature!

#gold bonds #buy gold bonds in india

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digitalefcme · 4 years

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We at Brantford, strive hard to be the best by assembling every asset life cycle management. Brantford provides venture debt finance to small and growing businesses (SGBs) through a customized and comprehensive credit approach focusing more on business and management viability than availability of collaterals. It de-productizes lending to SGBs to suit specific business requirements with repayments tied to anticipated cash flows.

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askstockmarket · 4 years

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Sovereign Gold Bonds

Sovereign Gold Bonds - Frequently Asked Questions What is Sovereign Gold Bond (SGB)? Who is the issuer? SGBs 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. Why should I buy SGB rather than physical gold? What are the benefits? The quantity of gold for which the investor pays is protected since he receives the ongoing market price at the time of redemption/ premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in Demat form eliminating the risk of loss of scrip etc. Are there any risks in investing in SGBs? There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for. Who is eligible to invest in the SGBs? A person resident in India as defined under the Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions. Whether joint holding will be allowed? Yes, joint holding is allowed. Can a Minor invest in SGB? Yes. The application on behalf of the minor has to be made by his/her guardian. Where can investors get the application form? The Application form will be provided by the issuing banks/SHCIL offices/designated Post Offices/agents. It can also be downloaded from the RBI’s website. Banks may also provide online application facility. What are the Know-Your-Customer (KYC) norms? Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s). Can an investor hold more than one investor ID for subscribing to the Sovereign Gold Bond? No. An investor can have only one unique investor Id linked to any of the prescribed identification documents. The unique investor ID is to be used for all the subsequent investments in the scheme. For holding securities in dematerialized form, quoting of PAN in the application form is mandatory. What are the minimum and maximum limit for investment? The Bonds are issued in denominations of one gram of gold and in multiples thereof. The minimum investment in the Bond shall be one gram with a maximum limit of subscription of 4 kg for individuals, 4 kg for HinduUndivided Family (HUF) and 20 kg for trusts and similar entities notified by the government from time to time per fiscal year (April –March). In case of joint holding, the limit applies to the first applicant. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the secondary market. The ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions Can each member of my family buy 4Kg in their own name? Yes, each family member can buy the bonds in his/her own name if they satisfy the eligibility criteria as defined at Q No.4. Can an investor/trust buy 4 Kg/20 Kg worth of SGB every year? Yes. An investor/trust can buy 4 Kg/20 Kg worth of gold every year as the ceiling has been fixed on a fiscal year (April-March) basis. Is the maximum limit of 4 Kg applicable in case of joint holding? The maximum limit will be applicable to the first applicant in case of a joint holding for that specific application. What is the rate of interest and how will the interest be paid? The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of the initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal. Who are the authorized agencies selling the SGBs? Bonds are sold through offices or branches of Nationalised Banks, Scheduled Private Banks, Scheduled Foreign Banks, designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL) and the authorised stock exchanges either directly or through their agents. If I apply, am I assured of allotment? If the customer meets the eligibility criteria, produces a valid identification document and remits the application money on time, he/she will receive the allotment. When will the customers be issued Holding Certificate? The customers will be issued a Certificate of Holding on the date of issuance of the SGB. Certificate of Holding can be collected from the issuing banks/SHCIL offices/Post Offices/Designated stock exchanges/agents or obtained directly from RBI on email if the email address is provided in the application form. Can I apply online? Yes. A customer can apply online through the website of the listed scheduled commercial banks. The issue price of the Gold Bonds will be ₹ 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. At what price the bonds are sold? The nominal value of Gold Bonds shall be in Indian Rupees fixed on the basis of simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewelers Association Limited, for the last 3 business days of the week preceding the subscription period. Will RBI publish the rate of gold applicable every day? The price of gold for the relevant tranche will be published on RBI website two days before the issue opens. What will I get on redemption? On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on a simple average of the closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited. How will I get the redemption amount? Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond. What are the procedures involved during redemption? The investor will be advised one month before maturity regarding the ensuing maturity of the bond. On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record. In case there are changes in any details, such as account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly. Can I encash the bond anytime I want? Is premature redemption allowed? Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates. The bond will be tradable on Exchanges if held in Demat form. It can also be transferred to any other eligible investor. What do I have to do if I want to exit my investment? In case of premature redemption, investors can approach the concerned bank/SHCIL offices/Post Office/agent thirty days before the coupon payment date. Request for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date. The proceeds will be credited to the customer’s bank account provided at the time of applying for the bond. Can I gift the bonds to a relative or friend on some occasion? The bond can be gifted/transferable to a relative/friend/anybody who fulfils the eligibility criteria (as mentioned at Q.no. 4). The Bonds shall be transferable in accordance with the provisions of the Government Securities Act 2006 and the Government Securities Regulations 2007 before maturity by the execution of an instrument of transfer which is available with the issuing agents. Can I use these securities as collateral for loans? Yes, these securities are eligible to be used as collateral for loans from banks, financial Institutions and Non-Banking Financial Companies (NBFC). The Loan to Value ratio will be the same as applicable to ordinary gold loan prescribed by RBI from time to time. Granting loan against SGBs would be subject to the decision of the bank/financing agency, and cannot be inferred as a matter of right. What are the tax implications on i) interest and ii) capital gain? Interest on the Bonds will be taxable as per the provisions of the 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 terms capital gains arising to any person on transfer of bond. Is tax deducted at source (TDS) applicable on the bond? TDS is not applicable on the bond. However, it is the responsibility of the bondholder to comply with the tax laws. Who will provide other customer services to the investors after issuance of the bonds? The issuing banks/SHCIL offices/Post Offices/Designated stock exchanges/agents through which these securities have been purchased will provide other customer services such as change of address, early redemption, nomination, grievance redressal, transfer applications etc. What are the payment options for investing in the Sovereign Gold Bonds? Payment can be made through cash (up to ₹ 20000)/cheques/demand draft/electronic fund transfer. Whether the nomination facility is available for these investments? Yes, nomination facility is available as per the provisions of the Government Securities Act 2006 and Government Securities Regulations, 2007. A nomination form is available along with Application form. An individual Non -resident Indian may get the security transferred in his name on account of his being a nominee of a deceased investor provided that (i) The Non-Resident investor shall need to hold the security till early redemption or till maturity and (ii) The interest and maturity proceeds of the investment shall not be repatriable. Can I get the bonds in Demat form? Yes. The bonds can be held in Demat account. A specific request for the same must be made in the application form itself. Till the process of dematerialization is completed, the bonds will be held in RBI’s books. The facility for conversion to Demat will also be available subsequent to allotment of the bond. Can I trade these bonds? The bonds are tradable from a date to be notified by RBI. (It may be noted that only bonds held in the de-mat form with depositories can be traded in stock exchanges). The bonds can also be sold and transferred as per provisions of Government Securities Act, 2006. Partial transfer of bonds is also possible. What is the procedure to be followed in the eventuality of death of an investor? The nominee/nominees to the bond may approach the respective Receiving Office with their claim. The claim of the nominee/nominees will be recognized in terms of the provision of the Government Securities Act, 2006 read with Chapter III of Government Securities Regulation, 2007. In the absence of nomination, claim of the executors or administrators of the deceased holder or claim of the holder of the succession certificate (issued under Part X of Indian Succession Act) may be submitted to the Receiving Offices/Depository. It may be noted that the above provisions are applicable in the case of a deceased minor investor also. The title of the bond in such cases too will pass to the person fulfilling the criteria laid down in Government Securities Act, 2006 and not necessarily to the Natural Guardian. Can I get part repayment of these bonds at the time of exercising put option? Yes, part holdings can be redeemed in multiples of one gm. How do I contact RBI to address my queries regarding Sovereign Gold Bond? A dedicated e-mail has been created by the Reserve Bank of India to receive queries from members of public on Sovereign Gold Bonds. Investors can mail their queries to rbi email id.

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#Bonds #CGT #ETF

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handykraft · 6 years

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Gold Investment Options in India

It goes without saying that gold is one of the most popular and important metals in the world. Despite the fact that gold rates fluctuate everyday, the yellow metal hasn’t lost its sheen and has proven to be a great investment. In India, buying gold ornaments is still the most common and popular way of investing in the metal. However, it is not the only way to invest in gold. Over the years, the advancement in the financial landscape has made gold investments far more accessible. Today, investors can diversify their portfolio with gold investment options that they do not need to hold physically. Want to learn what other gold investment options are available for you in India? Read further to know more.

Gold Bars

Gold bars, also referred as gold biscuits, are rectangular pieces of gold. They are available in weights starting from 0.5gms to 1kg. Among people, 5g and 10g gold bars are popular. If you are into physical form of gold then you can buy gold bars from banks or jewellers, which are often available as per the prevailing gold rate in the market. But one must note that, banks sell gold bars but do not buy them back. Gold bars of higher weight are cheaper to buy and the ones with lighter weight are easier to encash on a short notice. Gold bars work best for those who are interested in long-term benefits which can be easily converted into cash. Other benefits of investing in gold are:

It involves negligible making charges.

Unlike in gold ornaments, it does not require investor to make one big purchase.

You can encash or convert gold bars for jewellery any time in future.

Gold Coins/Jewellery

Buying gold coins or jewellery is another way to invest in physical gold. Even though the purity of gold jewellery or coins ranges from 14 karat to 24 karat, always choose the latter if you’re buying it for investment purpose. While jewellery can be bought in any denomination of gold depending on the type and weight, the weight of gold coins range from 0.5g to 100g but people usually buy them at 10g or less. Whenever you decide to purchase gold coins or jewellery, ensure that it is hallmarked with the purity sign thus affirming that you are getting the full worth of your money. You can buy gold coins from jewellers and later exchange them to buy gold jewellery or encash it. Banks also offer gold coins but they may not purchase it back. Other benefits of investing in gold include:

It involves negligible making charges.

Unlike in gold bonds, it does not require investor to make one big purchase.

You can encash them any time in future.

Gold ETFs

Gold ETF is an exchange-traded fund (ETF) that was introduced to track and reflect gold rates. These are basically units that are sold and bought on markets such as NSE (National stock Exchange) and BSE (Bombay Stock Exchange) like a stock of a company. In this, investors trade in gold without owning it physically. Even when redeeming or liquidating the units, all an investor gets is the unit’s equivalent cash. Gold ETFs are not used to diversify your investment portfolio but to also protect your financial interests against market stress. Since gold ETFs can only be traded through a demat account, therefore, it involves minute charges such as expense ratio and demat and broking fee.

Gold Monetisation Scheme

It is a gold savings account with the choice of your bank. Your gold savings account will earn interest for the gold that you deposit on the basis of the gold’s weight and the appreciation of its value. You can deposit your gold in any of the physical form such as jewellery, coins or bars. The minimum deposit required under this scheme is 30g of gold. The applicable interest rate will be at the discretion of the banks. The interest amount earned on the gold deposit will be disbursed at the intervals of 30 to 60 days. You will have to stay invested in this scheme for at least a year. Whether you want to redeem your returns in cash or other way must be specified at the time of enrolment so that things can be arranged accordingly.

Sovereign Gold Bond

Sovereign Gold Bonds (SGBs) are given out by the Reserve Bank of India (RBI) on behalf of the Indian Government. They are basically government securities given out in the units of grams. Interested investors can get them in a paper or demat form. As far as the bond’s nominal value is concerned, it is based on the average closing price in the week before foregoing the subscription period, published by the India Bullion and Jewellers Association Ltd. Trading in these bonds does not include entry charges or fund management cost. The distributions costs and sales commission paid by the issuing agency gets the reimbursed by the government. These bonds can be used as collateral for loans and can be traded on exchanges if the investor wants to exit early. Another good thing about these bonds is that its term lies between 5 and 7 years where units can be encashed anytime by the investor.

Gold Funds of Funds

Gold Fund of Fund (FoF) are open-ended mutual funds that invests in the units of gold ETFs. Their liquidity is equivalent to that of usual mutual funds. They can be bought and encashed at NAV (Net Asset Value) during any business day. The minimum investment amount required to invest in Gold FoFs can be as low as ₹1000/- where the added investment can be as low as ₹100/-. Investors can also use the SIP (Systematic Investment Planning) method of investment if they cannot shell out lump sum amount to invest in it. One of the best features of gold funds of funds is that it does not require demat or trading accounts to carry out trading in the market. To purchase Gold Fund units, a first-time gold mutual fund investor only needs to complete the KYC documentation, which will require your Aadhaar as well as PAN details. Those who already have completed the KYC process do not need to undergo fresh documentation.

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finanzwealth · 3 years

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*Why Invest in SGB?* ▪️ Gold linked returns ▪️ 2.5% Interest p.a. on Investment ▪️ 0% Capital Gains Tax on maturity (for Individual Investors) ▪️ No Purchase or Annual cost ▪️ Rs. 50 Online Discount per Gram ▪️4790 per gram offline *4740* per gram online ▪️ Hedge against inflation ▪️ Listed on stock exchanges ▪️ Securely held in Demat form ▪️ Eligible as collateral for loans ▪️ Gold expected to touch Rs.65,000/10 gms ▪️ Historical Annualized return of Gold since 1974 is 8.8% ▪️ 5-15% allocation to gold is recommended to diversify & enhance portfolio performance For more details ping us on https://wa.me/919022937373 https://wa.me/919920476588 #SGB #gold #bond #sovereigngoldbonds #Goldbond #finanz #finanzwealth #RetirementPlans #TaxPlanning #TaxSavingPlans (at Mumbai, Maharashtra) https://www.instagram.com/p/CSRcmLtigku/?utm_medium=tumblr

#sgb #gold #bond #sovereigngoldbonds #goldbond #finanz #finanzwealth #retirementplans #taxplanning #taxsavingplans

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sunshineweb · 4 years

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Sovereign Gold Bond Scheme August 2020 – Should you buy?

The fifth and sixth tranche of Sovereign Gold Bond Scheme August 2020 is available for the subscription from 3rd August to 7th August 2020 and again the sixth tranche from August 31st to September 2020.

Refer the complete list of Sovereign Gold Bond Schemes offerings for FY 2020-21 at “Sovereign Gold Bond Scheme FY 2020-21 – A complete calendar“.

BUT….Before proceeding further, I wish to share my earlier post which may be an eye-opener for you before jumping into Gold investing. In this post, I have compared the volatility of Gold of almost 95 years. Refer the same “Gold Price of Rs.18.75 in 1925 to Rs.47000 in 2020 – Should you invest?“.

This Gold Bonds scheme was launched in November 2015. The government launched this scheme to reduce the demand for physical gold. Indians buy around 300 tons of gold every year. This is to be imported from outside countries. Let us see the silent features of this scheme.

The Bonds shall be issued in the form of Government of India Stock in accordance with section 3 of the Government Securities Act, 2006. The investors will be issued a Holding Certificate (Form C). The Bonds shall be eligible for conversion into de-mat form.

Features of Sovereign Gold Bond Scheme August 2020

Before proceeding further, I will try to explain how the Sovereign Gold Bond Scheme August 2020 works in a simple image.

# Dates to subscribe

Sovereign Gold Bond Scheme August 2020 – Series 5 will be open for subscription from 3rd August 2020 to 7th August 2020. The Bonds will be issued on 11th August 2020.

The Sovereign Gold Bond Scheme August 2020 – Series 6 will be open for subscription from 31st August 2020 to 4th September 2020. The bonds will be issued on 8th September 2020.

# Who can invest?

Resident Indian entities including individuals (in his capacity as such individual, or on behalf of a minor child, or jointly with any other individual.), HUFs, Trusts, Universities, and Charitable Institutions can invest in such bonds.

Hence, NRIs are not allowed to participate in the Sovereign Gold Bond Scheme August 2020.

# Tenure of the Bond

The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.

Hence, after the 5 years onward you can redeem it on 6th, 7th or at maturity of 8th year. Before that, you can’t redeem.

RBI/depository shall inform the investor of the date of maturity of the Bond one month before its maturity.

# Minimum and Maximum investment

You have to purchase a minimum of 1 gram of gold. The maximum amount subscribed by an entity will not be more than 4 kgs per person per fiscal year (April-March) for individuals and HUF and 20 kg for trusts and similar entities notified by the government from time to time per fiscal year (April – March).

In the case of joint holding, the investment limit of 4 kgs will be applied to the first applicant only. The annual ceiling will include bonds subscribed under different tranches during initial issuance by the Government and those purchased from the secondary market.

The ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.

#Interest Rate

You will receive a fixed interest rate of 2.50% per annum payable semi-annually on the nominal value. Such interest rate is on the value of money you invested initially but not on the bond value as on date of interest payout.

Interest will be credited directly to your account which you shared while investing.

# Issue Price

The nominal value of the Bonds shall be fixed in Indian Rupees fixed on the basis of a simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period. The issue price of the Gold Bonds will be Rs 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

# Payment Option

Payment shall be accepted in Indian Rupees through cash up to a maximum of Rs.20,000/- or Demand Drafts or Cheque or Electronic banking. Where payment is made through cheque or demand draft, the same shall be drawn in favor of receiving an office.

# Issuance Form

The Gold bonds will be issued as Government of India Stock under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into the Demat form.

# Where to buy Sovereign Gold Bond Scheme August 2020?

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.

The Bonds will be sold through Scheduled Commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognized stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

# Loan against Bonds

The Bonds may be used as collateral for loans. The Loan to Value ratio will be as applicable to ordinary gold loan mandated by the RBI from time to time. The lien on the Bonds shall be marked in the depository by the authorized banks. The loan against SGBs would be subject to the decision of the lending bank/institution, and cannot be inferred as a matter of right by the SGB holder.

# Liquidity of the Bond

As I pointed above, after 5th year onwards you can redeem the bond on 6th or 7th year. However, the bond is available to sell in the secondary market (stock exchange) on a date as notified by the RBI.

Hence, you have two options. Either you can redeem it at 6th or 7th year or sell it secondary market after the notification of RBI.

Do remember that the redemption price will be in Indian Rupees based on the previous week’s (Monday-Friday) simple average of the closing price of gold of 999 purity published by IBJA.

# Nomination

You can nominate or change the nominee at any point of time by using Form D and Form E. An individual Non – resident Indian may get the security transferred in his name on account of his being a nominee of a deceased investor provided that:

the Non-Resident investor shall need to hold the security till early redemption or till maturity; and

the interest and maturity proceeds of the investment shall not be repatriable.

# Transferability

The Bonds shall be transferable by the execution of an Instrument of transfer as in Form ‘F’, in accordance with the provisions of the Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007, published in part 6, Section 4 of the Gazette of India dated December 1, 2007.

How to redeem the Sovereign Gold Bond Scheme August 2020?

As I explained above, you have an option to redeem only on the 6th, 7th, and 8th year (automatic and end of bond tenure). Hence, there are two methods one can redeem Sovereign Gold Bonds. Explaining both as below.

# At the maturity of the 8th year-The investor will be informed one month before maturity regarding the ensuing maturity of the bond. On the completion of the 8th year, both interest and redemption proceeds will be credited to the bank account provided by the customer at the time of buying the bond.

In case there are changes in any details, such as account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly.

# Redemption before maturity-If you planned to redeem before maturity i.e 8th year, then you can exercise this option on 6th or 7th year.

You have to approach the concerned bank/SHCIL offices/Post Office/agent 30 days before the coupon payment date. Request for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date. The proceeds will be credited to the customer’s bank account provided at the time of applying for the bond.

Taxation of Sovereign Gold Bond Scheme August 2020

There are three aspects of taxation. Let us see one by one.

1) Interest Income-The The semi-annual interest income will be taxable income for you. Hence, For someone in the 10%, 20%, or 30% tax bracket, the post-tax return comes to 2.25%, 2% and 1.75% respectively. This income you have to show under the head of “Income from Other Sources” and have to pay the tax accordingly (exactly like your Bank FDs).

2) Redemption of Bond-As I said above, after the 5th year onward you are eligible to redeem it on 6th,7th and 8th year (last year). Let us assume at the time of investment, the bond price is Rs.2,500 and at the time of redemption, the bond price is Rs.3,000. Then you will end up with a profit of Rs.500. Such capital gain arising due to redemption by an individual is exempted from tax.

3) Selling in the secondary market of Stock Exchange-There is one more taxation which may arise. Let us assume you buy today the Sovereign Gold Bond Issue FY 2018-19 – Series 6 and selling it in stock exchange after a year or so. In such a situation, any profit or loss from such a transaction will be considered as capital gain.

Hence, if these bonds are sold in the secondary market before maturity, then there are two possibilities.

# Before 3 years-If you sell the bonds within three years and if there is any capital gain, such capital gain will be taxed as per your tax slab.

# After 3 years-If you sell the bonds after 3 years but before maturity, then such capital gain will be taxed at 20% with indexation.

There is no concept of TDS. Hence, it is the responsibility of investors to pay the tax as per the rules mentioned above.

Whom to approach for service related issues?

The issuing banks/SHCIL offices/Post Offices/agents through which these securities have been purchased will provide other customer services such as change of address, early redemption, nomination, grievance redressal, transfer applications etc.

Along with this, a dedicated e-mail has been created by the Reserve Bank of India to receive queries from members of public on Sovereign Gold Bonds. Investors can mail their queries to this email id. Below is the e-mail id

RBI Email Id in case of Sovereign Gold [email protected]

Sovereign Gold Bond Scheme August 2020 – Should you buy?

Advantages of Sovereign Gold Bond Scheme August 2020

# After the GST entry, this Sovereign Gold Bond may be advantageous over physical Gold coins or bars. This product will not come under GST taxation. However, in the case of Gold coins and bars, earlier the VAT was at 1% to 1.2%, which is now raised to 3%.

# If your main purpose is to invest in gold, then apart from physical form, investing in ETF or in Gold Funds, this seems to be a better option. Because you no need to worry about physical safekeeping, no fund charges (like ETF or Gold Funds) and the Demat account is not mandatory.

# In this Sovereign Gold Bond Issue FY 2020-21, the additional benefit apart from the typical physical or paper gold investment is that the annual interest payment on the money you invested.

Hence, there are two types of income possibilities. One is interest income from the investment and second is price appreciation (if we are positive on gold). Hence, along with price appreciation, you will receive interest income also.

But do remember that such interest income is taxable. Also, to avoid tax, you have to redeem it only on 6th, 7th or 8th year. If you sell in the secondary market, then such gain or loss will be taxed as per capital tax gain rules.

# There is no TDS from the gain. Hence, you no need to worry about TDS part like Bank FDs.

# A sovereign guarantee of the Government of India will feel you SAFE.

Disdvantages of Sovereign Gold Bond Scheme August 2020

# If you are planning to invest in your physical usage after 8 years, then simply stay away from this. Because Gold is an asset, which gives you volatility like the stock market but the returns of your debt products like Bank FDs or PPF.

# The key point to understand is also that the interest income of 2.5% is on the initial bond purchase amount but not the yearly bond value. Hence, let us say you invested Rs.2,500, then they pay interest of 2.5% on Rs.2,500 only even though the price of gold moved up and the value of such investment is Rs.3,000.

# Liquidity is the biggest concern. Your money will be locked for 5 years. Also, redemption is available only once a year after 5th year.

In case you want to liquidate in a secondary market, then it is hard to find the right price and capital gain tax may ruin your investment.

# Sovereign guarantee of the Government of India may feel you secure. But the redemption amount is purely based on the price movement of the gold. Hence, if there is a fall in gold price, then you will get that discounted price only. The only guarantee here is 2.5% return on your invested amount and NO DEFAULT RISK.

REMEMBER, GOLD IS AN ASSET CLASS WHICH MAY GIVE YOU RETURNS OF DEBT PRODUCT BUT VOLATILITY LIKE EQUITY MARKET-Hence, do you need this asset as an investment in your portfolio?

Conclusion:-Buy the Sovereign Gold Bond Scheme August 2020 if your purpose is to have physical gold. However, if you are trying this product for investment purposes, then better to stay away. Don’t be in a mad rush just because of current year uptrend in the gold price.

Refer our latest posts:-

Sovereign Gold Bond Scheme August 2020 – Should you buy?

Mutual Funds for Tax Saving – Why you must avoid?

Power Of Compound Interest – NOT the 8th Wonder of the world!

Latest BDA Plots E-auction July – August 2020 – How to apply?

HNIs or Institutional Investors – Retail Debt Mutual Fund Investors SILENT enemies

List of Index Funds in India 2020

The post Sovereign Gold Bond Scheme August 2020 – Should you buy? appeared first on BasuNivesh.

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sunshineweb · 4 years

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Sovereign Gold Bond Scheme August 2020 – Should you buy?

Refer the complete list of Sovereign Gold Bond Schemes offerings for FY 2020-21 at “Sovereign Gold Bond Scheme FY 2020-21 – A complete calendar“.

Features of Sovereign Gold Bond Scheme August 2020

Before proceeding further, I will try to explain how the Sovereign Gold Bond Scheme August 2020 works in a simple image.

# Dates to subscribe

Sovereign Gold Bond Scheme August 2020 – Series 5 will be open for subscription from 3rd August 2020 to 7th August 2020. The Bonds will be issued on 11th August 2020.

The Sovereign Gold Bond Scheme August 2020 – Series 6 will be open for subscription from 31st August 2020 to 4th September 2020. The bonds will be issued on 8th September 2020.

# Who can invest?

Hence, NRIs are not allowed to participate in the Sovereign Gold Bond Scheme August 2020.

# Tenure of the Bond

The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.

Hence, after the 5 years onward you can redeem it on 6th, 7th or at maturity of 8th year. Before that, you can’t redeem.

RBI/depository shall inform the investor of the date of maturity of the Bond one month before its maturity.

# Minimum and Maximum investment

The ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.

#Interest Rate

Interest will be credited directly to your account which you shared while investing.

# Issue Price

# Payment Option

# Issuance Form

# Where to buy Sovereign Gold Bond Scheme August 2020?

# Loan against Bonds

# Liquidity of the Bond

Hence, you have two options. Either you can redeem it at 6th or 7th year or sell it secondary market after the notification of RBI.

Do remember that the redemption price will be in Indian Rupees based on the previous week’s (Monday-Friday) simple average of the closing price of gold of 999 purity published by IBJA.

# Nomination

the Non-Resident investor shall need to hold the security till early redemption or till maturity; and

the interest and maturity proceeds of the investment shall not be repatriable.

# Transferability

How to redeem the Sovereign Gold Bond Scheme August 2020?

In case there are changes in any details, such as account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly.

# Redemption before maturity-If you planned to redeem before maturity i.e 8th year, then you can exercise this option on 6th or 7th year.

Taxation of Sovereign Gold Bond Scheme August 2020

There are three aspects of taxation. Let us see one by one.

Hence, if these bonds are sold in the secondary market before maturity, then there are two possibilities.

# Before 3 years-If you sell the bonds within three years and if there is any capital gain, such capital gain will be taxed as per your tax slab.

# After 3 years-If you sell the bonds after 3 years but before maturity, then such capital gain will be taxed at 20% with indexation.

There is no concept of TDS. Hence, it is the responsibility of investors to pay the tax as per the rules mentioned above.

Whom to approach for service related issues?

RBI Email Id in case of Sovereign Gold [email protected]

Sovereign Gold Bond Scheme August 2020 – Should you buy?

Advantages of Sovereign Gold Bond Scheme August 2020

# In this Sovereign Gold Bond Issue FY 2020-21, the additional benefit apart from the typical physical or paper gold investment is that the annual interest payment on the money you invested.

# There is no TDS from the gain. Hence, you no need to worry about TDS part like Bank FDs.

# A sovereign guarantee of the Government of India will feel you SAFE.

Disdvantages of Sovereign Gold Bond Scheme August 2020

# Liquidity is the biggest concern. Your money will be locked for 5 years. Also, redemption is available only once a year after 5th year.

In case you want to liquidate in a secondary market, then it is hard to find the right price and capital gain tax may ruin your investment.

REMEMBER, GOLD IS AN ASSET CLASS WHICH MAY GIVE YOU RETURNS OF DEBT PRODUCT BUT VOLATILITY LIKE EQUITY MARKET-Hence, do you need this asset as an investment in your portfolio?

Refer our latest posts:-

Sovereign Gold Bond Scheme August 2020 – Should you buy?

Mutual Funds for Tax Saving – Why you must avoid?

Power Of Compound Interest – NOT the 8th Wonder of the world!

Latest BDA Plots E-auction July – August 2020 – How to apply?

HNIs or Institutional Investors – Retail Debt Mutual Fund Investors SILENT enemies

List of Index Funds in India 2020

The post Sovereign Gold Bond Scheme August 2020 – Should you buy? appeared first on BasuNivesh.

Sovereign Gold Bond Scheme August 2020 – Should you buy? published first on https://mbploans.tumblr.com/

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sunshineweb · 4 years

Text

Sovereign Gold Bond Scheme FY 2020-21 – A complete calendar

The government of India announced the Sovereign Gold Bond Scheme FY 2020-21 calendar details for the current financial year. The Sovereign Gold Bonds will be issued in six tranches from April 2020 to September 2020.

Sovereign Gold Bond Scheme FY 2020-21 – A complete calendar

As I mentioned above, the Sovereign Gold Bond Scheme FY 2020-21 will be issued in six tranches.

Features of Sovereign Gold Bond Scheme FY 2020-21

Before proceeding further, I will try to explain how the Sovereign Gold Bond Scheme FY 2020-21 works in a simple image.

# Who can invest?

Hence, NRIs are not allowed to participate in the Sovereign Gold Bond Scheme FY 2020-21

# Tenure of the Bond

The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.

Hence, after the 5 years onward you can redeem it on 6th, 7th or at maturity of 8th year. Before that, you can’t redeem.

RBI/depository shall inform the investor of the date of maturity of the Bond one month before its maturity.

# Minimum and Maximum investment

The ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.

#Interest Rate

Interest will be credited directly to your account which you shared while investing.

# Issue Price

# Payment Option

# Issuance Form

# Where to buy Sovereign Gold Bond Scheme FY 2020-21

# Loan against Bonds

# Liquidity of the Bond

Hence, you have two options. Either you can redeem it at 6th or 7th year or sell it secondary market after the notification of RBI.

Do remember that the redemption price will be in Indian Rupees based on the previous week’s (Monday-Friday) simple average of the closing price of gold of 999 purity published by IBJA.

# Nomination

the Non-Resident investor shall need to hold the security till early redemption or till maturity; and

the interest and maturity proceeds of the investment shall not be repatriable.

# Transferability

How to redeem the Sovereign Gold Bond Scheme FY 2020-21?

As I explained above, you have an option to redeem only on 6th, 7th and 8th year (automatic and end of bond tenure). Hence, there are two methods one can redeem Sovereign Gold Bonds. Explaining both as below.

In case there are changes in any details, such as account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly.

# Redemption before maturity-If you planned to redeem before maturity i.e 8th year, then you can exercise this option on 6th or 7th year.

Taxation of Sovereign Gold Bond Scheme FY 2020-21

There are three aspects of taxation. Let us see one by one.

Hence, if these bonds are sold in the secondary market before maturity, then there are two possibilities.

# Before 3 years-If you sell the bonds within three years and if there is any capital gain, such capital gain will be taxed as per your tax slab.

# After 3 years-If you sell the bonds after 3 years but before maturity, then such capital gain will be taxed at 20% with indexation.

There is no concept of TDS. Hence, it is the responsibility of investors to pay the tax as per the rules mentioned above.

Whom to approach for service related issues?

RBI Email Id in case of Sovereign Gold [email protected]

Sovereign Gold Bond Scheme FY 2020-21 – Should you invest?

Advantages of Sovereign Gold Bond Scheme FY 2020-21

# In this Sovereign Gold Bond Issue FY 2020-21, the additional benefit apart from the typical physical or paper gold investment is that the annual interest payment on the money you invested.

# There is no TDS from the gain. Hence, you no need to worry about TDS part like Bank FDs.

# A sovereign guarantee of the Government of India will feel you SAFE.

Disadvantages of Sovereign Gold Bond Scheme FY 2020-21

# If you are planning to invest for your physical usage after 8 years, then simply stay away from this. Because Gold is an asset, which gives you volatility like the stock market but the returns of your debt products like Bank FDs or PPF.

# Liquidity is the biggest concern. Your money will be locked for 5 years. Also, redemption is available only once a year after 5th year.

In case you want to liquidate in a secondary market, then it is hard to find the right price and capital gain tax may ruin your investment.

REMEMBER, GOLD IS AN ASSET CLASS WHICH MAY GIVE YOU RETURNS OF DEBT PRODUCT BUT VOLATILITY LIKE EQUITY MARKET-Hence, do you need this asset as an investment in your portfolio?

Conclusion:-During current financial situation, many are looking at Gold as safe heaven. For them Sovereign Gold Bond Schemes may be a boon. However, as I pointed above, Gold is also volatile in nature. Hence, considering all the pros and cons, take your concious decision. I personally stay away from Gold as an investment.

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The post Sovereign Gold Bond Scheme FY 2020-21 – A complete calendar appeared first on BasuNivesh.

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sunshineweb · 4 years

Text

Sovereign Gold Bond Scheme FY 2020-21 – A complete calendar

As I mentioned above, the Sovereign Gold Bond Scheme FY 2020-21 will be issued in six tranches.

Features of Sovereign Gold Bond Scheme FY 2020-21

Before proceeding further, I will try to explain how the Sovereign Gold Bond Scheme FY 2020-21 works in a simple image.

# Who can invest?

Hence, NRIs are not allowed to participate in the Sovereign Gold Bond Scheme FY 2020-21

# Tenure of the Bond

The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.

Hence, after the 5 years onward you can redeem it on 6th, 7th or at maturity of 8th year. Before that, you can’t redeem.

RBI/depository shall inform the investor of the date of maturity of the Bond one month before its maturity.

# Minimum and Maximum investment

The ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.

#Interest Rate

Interest will be credited directly to your account which you shared while investing.

# Issue Price

# Payment Option

# Issuance Form

# Where to buy Sovereign Gold Bond Scheme FY 2020-21

# Loan against Bonds

# Liquidity of the Bond

Hence, you have two options. Either you can redeem it at 6th or 7th year or sell it secondary market after the notification of RBI.

Do remember that the redemption price will be in Indian Rupees based on the previous week’s (Monday-Friday) simple average of the closing price of gold of 999 purity published by IBJA.

# Nomination

the Non-Resident investor shall need to hold the security till early redemption or till maturity; and

the interest and maturity proceeds of the investment shall not be repatriable.

# Transferability

How to redeem the Sovereign Gold Bond Scheme FY 2020-21?

In case there are changes in any details, such as account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly.

# Redemption before maturity-If you planned to redeem before maturity i.e 8th year, then you can exercise this option on 6th or 7th year.

Taxation of Sovereign Gold Bond Scheme FY 2020-21

There are three aspects of taxation. Let us see one by one.

Hence, if these bonds are sold in the secondary market before maturity, then there are two possibilities.

# Before 3 years-If you sell the bonds within three years and if there is any capital gain, such capital gain will be taxed as per your tax slab.

# After 3 years-If you sell the bonds after 3 years but before maturity, then such capital gain will be taxed at 20% with indexation.

There is no concept of TDS. Hence, it is the responsibility of investors to pay the tax as per the rules mentioned above.

Whom to approach for service related issues?

RBI Email Id in case of Sovereign Gold [email protected]

Sovereign Gold Bond Scheme FY 2020-21 – Should you invest?

Advantages of Sovereign Gold Bond Scheme FY 2020-21

# In this Sovereign Gold Bond Issue FY 2020-21, the additional benefit apart from the typical physical or paper gold investment is that the annual interest payment on the money you invested.

# There is no TDS from the gain. Hence, you no need to worry about TDS part like Bank FDs.

# A sovereign guarantee of the Government of India will feel you SAFE.

Disadvantages of Sovereign Gold Bond Scheme FY 2020-21

# Liquidity is the biggest concern. Your money will be locked for 5 years. Also, redemption is available only once a year after 5th year.

In case you want to liquidate in a secondary market, then it is hard to find the right price and capital gain tax may ruin your investment.

REMEMBER, GOLD IS AN ASSET CLASS WHICH MAY GIVE YOU RETURNS OF DEBT PRODUCT BUT VOLATILITY LIKE EQUITY MARKET-Hence, do you need this asset as an investment in your portfolio?

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