Sovereign Gold Bond scheme 2023 subscription closes on THIS date: 10 reasons to subscribe govt-backed digital gold scheme

Sovereign Gold Bond Scheme 2023 Date, Price: The Sovereign Gold Bond (SGB) scheme 2022-23 - Series IV subscription window will close on March 10. The subscription window opened on March 10. The Reserve Bank of India (RBI) issues the Sovereign Gold Bond (SGB) on behalf of the Central government. 

Sovereign Gold Bond Scheme 2023 Price, Discount 

SGB issue price has been fixed at Rs 5,611 per gram of gold or per unit. The government offers a discount of Rs 50 per gram to those applying online and making payment through digital mode. For such investors, SGB issue price has been fixed at Rs 5,561 per gram.

Sovereign Gold Bond: 10 reasons to invest in SGBs

1. Impurities free

SGBs bonds are denoted by 999 purity. When you buy SGB, it is free from issues like purity, making charges and others. These bonds are considered to be an alternative to physical gold and has no impurity. 

2. No default risk

There is no risk of default since SGBs are issued by the Reserve Bank of India on behalf of the Central government.

3. No capital gains tax

The default maturity period of SGCs is 8 years. The government, however, allows investors to exit after 5 years subject to certain conditions. The capital gains tax at the time of maturity is exempted. If one exits before 5 years, he/she will have to pay capital gains tax.

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4. Collateral for loans

SGBs are eligible to be used as collateral for loans. The Loan to Value ratio is the same as applicable to ordinary gold loans prescribed by RBI from time to time. However, sanctioning loans against SGBs is subject to the decision of the financial institutions. It cannot be inferred as a matter of right.

5. No GST or STT

SGBs are free of tax, there is no security transaction tax imposed on trades in SGBs.

6. No design or making charges

One does not need to pay any making charges in SGBs. One only pays for the metal.

7. DEMAT form

Investors can hold SGBs in Demat form. Thus,  one does not need to carry physical paper all the time. 

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8.  Maturity return 

The quantity of gold for which the investor pays is protected in SGBs since they receive the ongoing market price at the time of redemption. For instance, if one buys 1 unit (1 gram of gold) at Rs 5,000 and the market price of gold rises to 8,000 per gram at the time of maturity, he/she will get the prevailing market price.

9. Tradable on exchanges

SGBs are tradable on exchanges as well. SGBs can also be transferred to any other eligible investor.

10. Sovereign Gold Bond Interest Rate

The government pays 2.5 per cent interest yearly on the amount invested till maturity. The interest amount is credited semi-annually into the bank accounts of investors. The interest earned is taxable as per the provisions of the Income Tax Act, 1961.

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