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Launching of Gold Schemes on 5 November, 2015 is a great Pre Diwali Gift to all Indians by our Prime Minister Shri Narendra Modi. It’s ‘sone pe suhaga’ for our country. If India has 20000 tonnes of gold, worth Rs. 55 Lakhs Crores, why it should import gold and rely on other countries? Now no more reason for us to be called as poor.

Three Schemes were launched this Thursday by PM Modi. Huge piles of unused gold will be recycled and put to productive use for our economy. This will greatly help in reducing import of gold coins and bars.

Now we will go through these three schemes in detail:


1. Investment Limit?

Minimum deposit limit prescribed is raw gold (coins, bars, jewellery) of 30 grams. No Maximum limit.

2. How to begin?

i. Go to BIS certified Collection & Purity Testing Centres (CPTC). These centres will soon be notified by the Central Government. Deposit your tested and certified gold.

ii. Comply with all KYC norms and regulations. These will be same as before.

iii. You will get the deposit certificates in return. Just keep them in safe. Principal and interest both will be denominated in gold.

iv. Banks will accept gold deposits under Short Term Bank Deposit (1-3 years), Medium Term Bank Deposit (5-7 years) and Long Term Bank Deposit (12-15 years).

v. Deposit Certificates will be issued equivalent to 995 fineness of gold.

3. Interest Rate

Rate of Interest will be as follows:

Time Period

Interest Rate (%)

1-3 years

Banks will decide

5-7 years


12-15 years


4. Is premature withdrawal permitted?

Answer is yes but only after prescribed lock in period is over with penalty.

5. Will Gold Deposit Scheme, 1992 continue?

Till maturity the scheme can be continued or you can withdraw prematurely.


The Union Finance Minister had announced in Union Budget 2015-16 about developing Sovereign Gold Bonds as a financial asset. These bonds will be issued by RBI on behalf of the Indian Government.

1. Investment Limit

Minimum prescribed limit is 2 grams of gold. Maximum limit is 500 grams per person for each Financial Year. Self declaration is to be submitted in this behalf.

2. Where to apply?

Applications may be submitted from November 5 - 20, 2015 to the banks and designated post offices. These bonds will be issued on November 26, 2015. Bonds will be restricted for sale to resident individuals, HUFs, trusts, universities and charitable institutions.

3. Tenure of Bond?

Tenure of bonds will be 8 years.

4. Exit Option?

Yes Exit is allowed but only after fifth year.

5. Interest Rate?

Interest rate will be 2.75% per annum payable semi annually on the initial investment.

6. How it works?

i. Prices are based on previous week’s (Monday to Friday) simple average of closing price of gold of 999 purity published by the Indian Bullion and Jewellers Association Ltd. 

ii. KYC norms are same as before.

iii. Investors will get stock holding certificate. Bonds can also be kept in demat form instead of physical form.

iv. Interest on gold bonds will be taxable as per normal provisions of IT Act, 1961. Capital gain tax will also remain same just like in physical gold.

v. Distributor will get 1% commission of the subscription amount.

vi. Bonds can be used as collateral security to obtain loans. Plus liquidity is more as compared to physical gold.


Gold Coins will be first national gold coins. National Emblem of Ashoka Chakra will be engraved on them.

i. Coins will be available in 5, 10 and 20 grams.

ii. Purity is 24 karat and 999 fineness.

iii. Hallmarking will be done on all coins.

iv. MMTC outlets will be there for distribution. Later on banks and post offices will also participate.

Not only from households but huge volumes of gold are expected to come from temples and other trusts that have tonnes of gold lying idle. More productive use of gold will help in reducing our imports and recycling the metal.

Profile of Indians will be rebalanced from traditional gold purchase to productive investment. Interest rate should be too attractive if optimum success of the scheme is desired. 

One point that PM Modi has stated in his speech is that you can use your gold bonds even on midnight if you have no liquid money in hand. Use these bonds as your collateral security in times of need. These bonds are also easily transferable. Even thieves will not try to even touch them. Gold bonds are your safest assets.

What for are you waiting for?

Warm Regards,
CA. Neha Gupta
B.Com, ACA, AIR (Final) 36
LNG & Associates
Chartered Accountants


Published by

CA Neha Gupta
(Managing Partner, LNG & Associates)
Category Others   Report

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