The Government has issued Sovereign Gold Bond Scheme 2020-21. The Sovereign Gold Bonds will be issued in six tranches from April 2020 to September 2020 and will be sold through Scheduled Commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited, designated post offices, and recognized stock exchanges.
|Date of Subscription
|Date of Issuance
|2020-21 Series I
|April 20-24, 2020
|April 28, 2020
|2020-21 Series II
|May 11-15, 2020
|May 19, 2020
|2020-21 Series III
|June 08-12, 2020
|June 16, 2020
|2020-21 Series IV
|July 06-10, 2020
|July 14, 2020
|2020-21 Series V
|Aug 03-07, 2020
|August 11, 2020
|2020-21 Series VI
|September 08, 2020
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 features of the Bond are as under:
|Sovereign Gold Bond 2020-21
|To be issued by Reserve Bank of India on behalf of the Government of India
|The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
|The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
|The tenor of the Bond will be for a period of 8 years with exit option after 5thyear to be exercised on the interest paymentdates.
|Minimum permissible investment will be 1 gram of gold.
|The maximum limit of subscription 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.
|In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.
|Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period. The issue price of the Gold Bonds will be ` 50 per gram less for those who subscribe online and pay through digital mode.
|Payment for the Bonds will be through cash payment (upto a maximum of `20,000) or demand draft or cheque or electronic banking.
|The Gold Bonds will be issued as Government of India Stock under GS Act, 2006. The investors will be issued a HoldingCertificate for the same. The Bonds are eligible for conversion into demat form.
|The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity, of previous 3 working days published by IBJA Ltd. previous 3 working days published by IBJA Ltd.
|Bonds will be sold through Commercial banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices (as may be notified) and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.
|The investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.
|Bonds can be used as collateral for loans. The loan-to-value(LTV) ratio is to be set equal to ordinary gold loan mandatedby the Reserve Bank from time to time
|Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to individuals and other entities
|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
|Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
|Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio.
|Commission for distribution of the bond shall be paid at the rate of 1% of the total subscription received by the receiving offices and receiving offices shall share at least 50% of thecommission so received with the agents or sub agents for the business procured through them.