Ministry of Finance Sovereign Gold Bond Scheme
Organization : Ministry of Finance
Scheme Name : Sovereign Gold Bond Scheme
Applicable For : Investors
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Website : https://www.finmin.nic.in/
Sovereign Gold Bond :
The Government of India will be launching the Sovereign Gold Bonds Scheme soon. As investors will get returns that are linked to gold price, the scheme is expected to offer the same benefits as physical gold. They can be used as collateral for loans and can be sold or traded on stock exchanges.
Related : Ministry of Finance Atal Pension Yojana Scheme : www.statusin.in/6581.html
Benefits:
** The Sovereign Gold Bonds will be available both in demat and paper form.
** The tenor of the bond is for a minimum of 8 years with option to exit in 5th, 6th and 7th years.
** They will carry sovereign guarantee both on the capital invested and the interest.
** Bonds can be used as collateral for loans.
** Bonds would be allowed to be traded on exchanges to allow early exits for investors who may so desire.
** Further, bonds would be allowed to be traded on exchanges to allow early exits for investors who may so desire.
** In Sovereign Gold Bonds, capital gains tax treatment will be the same as for physical gold for an ‘individual’ investor. The department of revenue has said that they will consider indexation benefit if bond is transferred before maturity and complete capital gains tax exemption at the time of redemption.
How can i buy it?:
Sovereign Gold Bonds will be issued on payment of rupees and denominated in grams of gold. Minimum investment in the bond shall be 2 grams. The bonds can be bought by Indian residents or entities and is capped at 500 grams.
Where can i buy it?:
Investors can apply for the bonds through scheduled commercial banks and designated post offices. NBFCs, National Saving Certificate (NSC) agents and others, can act as agents. They would be authorised to collect the application form and submit in banks and post offices.
Who is issuing the bonds?:
The Bonds are issued by the Reserve Bank of India on behalf of the Government of India. The bonds are distributed through banks and designated post offices. This should make subscribing to the bonds an easy affair. During redemption, “the price of gold may be taken from the reference rate, as decided, and the Rupee equivalent amount may be converted at the RBI Reference rate on issue and redemption”.
Who is eligible to invest in the SGBs?:
Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities, charitable institutions, etc.
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/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?:
Know-Your-Customer (KYC) norms will be the same as that for purchase of physical form of gold. Identification documents such as Aadhaar card/PAN or TAN /Passport / Voter ID card will be required. KYC will be done by the issuing banks/Post Offices/agents.
WILL SGB BE ACCEPTED BY BANKS TO RAISE LOAN ( GOLD JEWELLERY LOAN) FOR AGRICULTURAL PURPOSES? PRESENTLY BANKS GRANT AGRICULTURAL JEWEL LOAN AT 04.00% pa ( FOUR PERCENT ) FOR FARMERS WHO OWN AND CULTIVATE THEIR LANDS UPTO RS. 3,00,000/- ( UPTO RS. THREE LAKH ONLY) on physical TRANSFER OF JEWELS BY THE BORROWER AND THE JEWELS REMAIN WITH THE BANK UNTIL THE SAME IS REDEEMED AFTER PAYING OFF THE PRINCIPAL WITH APPLICABLE INTEREST AT 4.00%. I NEED YOUR GUIDANCE WHETHER THE SGB WILL BE ACCEPTED BY THE BANKS FOR AGRI JEWEL LOAN PURPOSES AND TREATED AS PHYSICAL GOLD AND ADVANCES GRANTED. THE INTENTION IS TO PURCHASE SGB AND AS WELL USE THE SAME FOR AGRI JEWEL LOAN PURPOSES.