The Reserve Bank of India or RBI has issued the calendar of gold bond issuance for the six-month period (October to December). According to RBI's calendar, sovereign gold bonds will be issued in two tranches this month: October 7-11 (2019-20 Series V) and October 21-25 (2019-20 Series VI). Gold buying is expected to pick up this month due to festivals like Dussehra, Dhanteras and Diwali. The issuance date of the 2019-20 Series V and 2019-20 Series VI series of gold bonds will be October 15 and October 30. These bonds are issued by RBI on behalf of the Government of India.
Calendar of gold bond issuance Date or Subscription/Date of Issuance
2019-20 Series V October 7-11/October 15
2019-20 Series VI October 21-25/October 30
2019-20 Series VII December 2-6/December 10
2019-20 Series VIII January 13-17/January 21
2019-20 Series IX February 03-07/February 11
2019-20 Series X March 02-06/March 11
Here are 10 things to know about sovereign gold bonds:
1) Gold bonds will be issued in denominations of one gram of gold or multiples there of.
2) The issuance price of the gold bonds will be fixed on the basis of price of gold of 999 purity for the last three working days of the week preceding the subscription period. RBI will offer a discount of ₹50 per gram on issue price to those applying online and making payment through digital mode.
3) PAN number of the applicant is mandatory.
4) Interest @2.5% per annum will be paid on the nominal value of gold bond, payable twice a year.
5) Gold bonds have a maturity period of 8 years. On maturity, the redemption price is based on the average closing price of 999 purity gold of previous three working days, published by India Bullion and Jewellers Association Limited.
6) Premature redemption of gold bonds are allowed after the fifth year.
7) Gold bonds can be issued as collateral for loans.
8) The interest received on your gold bond holdings is taxable.
9) No capital gains tax is applicable on gold bonds if held till maturity. This is an exclusive tax benefit available on gold bonds as compared to other other investment options like gold ETF, gold funds or physical gold.
10) Gold bonds trade on stock exchange, offering an early exit option. The price of the bonds in the market will reflect the price of gold and the demand and supply of the bonds.