Sovereign Gold Bond Scheme issued by Government of India
Individuals, HUFs, Trusts, Universities & Charitable Institutions are eligible to invest. The tenor is 8 years with exit option after 5th years on interest payment dates. Minimum issue Size1 Gram of Gold maximum Limit is 4KG for Individuals & HUF, 20KG for Trusts & Similar entities.
Issue Price is fixed by the Government based on the prevailing gold price and will be announced during the launch. For the schemes launched during 2020, the issue prices are: Series I – Rs 4589 per gram, Series II – Rs 4540 per gram, Series III – Rs 4627 per gram and Series IV – Rs 4802 per gram.
Safety: The bonds carry sovereign guarantee (Issued by GOI)
Tax Benefit: No Capital gain tax on maturity / redemption for individual investors
Sovereign Gold Bond vs. Physical Gold vs. Gold ETF | |||
Sovereign Gold Bond | Physical Gold | Gold ETF | |
Returns | Higher than actual return on gold | Lower than actual return on gold | Lower than actual return on gold |
Safety | High | Risk of handling | High |
Purity | High – Electronic Form | Always remains a question | High – Electronic Form |
Wealth Tax | Not Applicable | Applicable @1% of total valuation every year. | Not Applicable |
Capital Gain | Long Term Capital Gains after 3 yrs. No LTCG if held till maturity | Long Term Capital Gain Tax applicable after 3 years | Long Term Capital Gain Tax applicable after 3 years |
Collateral against Loan | Yes | Yes | No |
Storage Cost | Very Low | High | Very Low |
