The Indian Government, in coordination with the Reserve Bank of India (RBI), has announced the issuance of new tranches of Sovereign Gold Bonds (SGBs) for the fiscal year 2023-24.
According to The Economic Times report, the SGB Series III for 2023-24 will be open for subscription from December 18 to December 22, 2023, with the bonds set to be issued on December 28, 2023. Additionally, the Series IV subscription period is slated from February 12 to February 16, 2024, with an issuance date of February 21, 2024.
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These bonds will be available through Scheduled Commercial Banks (excluding Small Finance Banks, Payment Banks, and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and on recognised stock exchanges like the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.
The report added that each SGB will be denominated in multiples of one gram of gold, with a tenure of eight years and an option for early redemption after the fifth year on interest payment dates. The minimum investment is set at one gram of gold, and payments can be made in cash (up to Rs 20,000), demand draft, cheque, or electronic banking.
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The pricing of the SGBs will be determined based on the simple average of the closing price of gold of 999 purity, as published by the India Bullion and Jewellers Association Limited (IBJA), for the last three working days preceding the subscription period. Online subscribers paying digitally will receive a discount of Rs 50 per gram.
According to the report, investors in these bonds will earn an interest of 2.50 percent per annum, payable semi-annually on the nominal value. While the interest on SGBs is taxable, the capital gains from the redemption are exempt. Additionally, long-term capital gains from SGB transfers are eligible for indexation benefits.
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The subscription limits per fiscal year are 4 kg for individuals and Hindu Undivided Families (HUF), and 20 kg for trusts and similar entities. These limits include bonds purchased in various tranches and on the secondary market, with investors required to provide a self-declaration to this effect.
