Sovereign Gold Scheme 2019-20 launched: Check key details to make the most of it

Sovereign Gold Scheme (SGB) 2019-20: The Government of India has decided to issue the Sovereign Gold Bonds. The decision has been taken in consultation with the RBI. Ministry of Finance today said that the Sovereign Gold Bonds will be issued every month from June 2019 to September 2019. The Bonds will be sold through Scheduled Commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited, the Ministry said. 

The SGBs will be sold as per the following calendar:

Here are key features of SGB 2019-20:

- SGB 2019-20 will be issued by Reserve Bank India on behalf of the Government of India. The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

- Denomination: The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.

- Tenor: The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment dates.

- Minimum size: Minimum permissible investment will be 1 gram of gold. Maximum limit: The maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market.

- Interest rate: The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.

- Tax treatment: The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.

- Tradability: Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.