GoI issues the Sovereign Gold Bond Scheme 2021-22

Last updated: 13 May 2021

Save Share

Quick Summary

The Government of India, in collaboration with the Reserve Bank of India, is launching the Sovereign Gold Bond Scheme 2021-22. These bonds will be available in six tranches between May and September 2021. They are open to resident individuals, HUFs, trusts, universities, and charitable institutions, with a minimum investment of 1 gram of gold. The bonds offer an 8-year tenor with an option to exit after the fifth year, a fixed interest rate of 2.50% per annum, and capital gains tax exemption on redemption.

The Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds. The Sovereign Gold Bonds will be issued in six tranches from May 2021 to September 2021 as per the calendar specified below:

S. No.	Tranche	Date of Subscription	Date of Issuance
1.	2021-22- Series I	May 17-21, 2021	May 25, 2021
2.	2021-22 Series II	May 24 – 28, 2021	June 01, 2021
3.	2021-22 Series III	May 31 – June 04, 2021	June 08, 2021
4.	2021-22 Series IV	July 12-16, 2021	July 20, 2021
5.	2021-22 Series V	Aug. 09-13, 2021	Aug. 17, 2021
6.	2021-22 Series VI	Aug. 30- Sept.03, 2021	Sept. 07, 2021

Sovereign Gold Bonds 2021-22: Invest in Gold

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:

Sl. No.	Item	Details
1	Product name	Sovereign Gold Bond 2021-22
2	Issuance	To be issued by Reserve Bank of India on behalf of the Government of India.
3	Eligibility	The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
4	Denomination	The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
5	Tenor	The tenor of the Bond will be for a period of 8 years with exit option after5^thyear to be exercised on the next interest payment dates.
6	Minimum size	Minimum permissible investment will be 1 gram of gold.
7	Maximum limit	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 issuanceby Government and those purchased from the Secondary Market.
8	Joint holder	In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.
9	Issue price	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.
10	Payment option	Payment for the Bonds will be through cash payment (upto a maximum of `20,000) or demand draft or cheque or electronic banking.
11	Issuance form	The Gold Bonds will be issued as Government of India Stock under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form.
12	Redemption price	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.
13	Sales channel	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.
14	Interest rate	The investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.
15	Collateral	Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
16	KYC documentation	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.
17	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.
18	Tradability	Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
19	SLR eligibility	Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio.
20	Commission	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 the commission so received with the agents or sub agents for the business procured through them.

FAQ :

The Sovereign Gold Bond Scheme 2021-22 is an initiative by the Government of India, in consultation with the Reserve Bank of India, to issue gold bonds.

The bonds will be issued in six tranches from May 2021 to September 2021, with specific subscription and issuance dates for each series.

Eligibility is restricted to resident individuals, Hindu Undivided Families (HUFs), Trusts, Universities, and Charitable Institutions.

The bonds are denominated in grams of gold, have a tenor of 8 years with an exit option after 5 years, a minimum investment of 1 gram, and a maximum limit per fiscal year. They also offer a fixed interest rate of 2.50% per annum and can be used as collateral for loans.

The issue price is fixed in Indian Rupees based on the simple average of the closing price of 999 purity gold for the last three working days before the subscription period. A discount of ₹50 per gram is offered for online subscriptions paid digitally.

The interest earned on the Gold Bonds is taxable as per the Income Tax Act, 1961. However, capital gains tax on redemption for individuals is exempted, and indexation benefits are provided for long-term capital gains.

1743 Views Comment Share Miscellaneous Report

News posted by

CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

Click here to Login and post comments OR