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Business News/ Money / Personal Finance/  Sovereign Gold Bond Scheme 2023-24: New series opens for subscription at 6,263/gm; apply online for discount

Sovereign Gold Bond Scheme 2023-24: New series opens for subscription at ₹6,263/gm; apply online for discount

The next tranche of Sovereign Gold Bond opens for subscription on 12 February, with an issue price of 6,263 per gram

The government launched the sovereign gold bond scheme in November 2015 with an objective to reduce the demand for physical gold. Photo: Bloomberg

The next tranche of Sovereign Gold Bond opens for subscription on 12 February, with an issue price of 6,263 per gram, according to the Reserve Bank of India (RBI). The Scheme will be open for subscription until 16 February. The Sovereign Gold Bond Scheme 2023-24 - Series IV will be open for subscription during February 12–16, 2024.

Sovereign Gold Bond Scheme opens for subscription: Online discount

Investors applying online and making payments through digital mode will receive a discount of 50 per gram, resulting in an issue price of 6,213, the RBI said. The Sovereign Gold Bonds will be sold through various channels including scheduled commercial banks, post offices, and stock exchanges.

Taxation of Sovereign Gold Bonds

The Sovereign Gold Bonds have a tenor of eight years with an option for premature redemption after the fifth year. Interest is paid at a fixed rate of 2.50% per annum and is fully taxable. However, profits made on redemption are fully tax-free. “As far as profits made at the time of redemption of Sovereign Gold Bonds are concerned, the same is fully tax-free in your hands. This rule for profits made on redemption applies, whether at the end of the original tenure of 8 years or on early redemption which is allowed after 5 years," said Mumbai-based tax and investment expert Balwant Jain.

The exemption is applicable whether you acquired the SGB as an original subscriber or bought from a secondary market. This exemption on redemption is available only to an Individual and does not apply to other entities that are allowed to invest in SGB, he added.

If the bonds are transferred or sold, the profits made on the sale of these bonds become fully taxable as long-term or short-term depending on the holding period. “The holding period for SGB is 12 months to make their long-term capital assets. If sold/transferred after 12 months, you are entitled to claim the benefit of indexation while computing the taxable long-term capital gains. You also have the option to pay a flat tax @ 10% of the profit if it is more beneficial than indexing the capital gains. You can also claim an exemption under Section 54F for such long-term capital gains by investing the proceeds in a residential house within the specified time," said Balwant Jain.

Sovereign Gold Bond Scheme 2023-24 opens for subscription

Next tranche of Sovereign Gold Bond opens for subscription. Should you buy?

The Sovereign Gold Bond Scheme is a tempting choice for Indian residents wanting to add gold to their portfolios. With the most recent tranche currently open, these bonds provide an exceptional opportunity to possess gold in tangible form.

“For those seeking portfolio diversification, capital appreciation possibilities, and favorable tax treatment compared to physical gold, SGBs deserve consideration," said Ashish Aggarwal, Director, of Acube Ventures.

The Reserve Bank of India's successful management of previous SGB issuances and the underlying stability of gold as an asset class should instill confidence among investors. Given gold's long-standing role as a hedge against market uncertainty, the current global financial climate further elevates the metal's appeal. We encourage interested investors to apply for these bonds during the specified subscription window, he added.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Sangeeta Ojha

A business media enthusiast. Writes on personal finance, business and banking.
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