The Government of India will open Sovereign Gold Bonds 2020-21 (Series X) from January 11-15, with settlement date January 19.
The issue price of the Bond during the subscription period shall be Rs 5,104 per gram, a government statement said.
Investors applying online and making the payment through digital mode will discount of Rs 50 per gram from the issue price. For such investors the issue price of gold bond will be Rs 5,054 per gram.
SGBs are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The bond is issued by Reserve Bank of India on behalf of the government.
Minimum investment in the bond is one gram and maximum limit is 4 kg for individuals.
The bonds bear interest of 2.5% per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal.
Though the tenor of the bond is eight years, early encashment/redemption of the bond is allowed after fifth year from the date of issue on coupon payment dates. The bond will be tradable on exchanges, if held in demat form. It can also be transferred to any other eligible investor.
Interest on the bonds will be taxable. However, the capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long terms capital gains arising to any person on transfer of bond.