Sovereign Gold Bonds 2015 - Earn 2.75% interest by investing in Gold - Indian Govt Scheme

Applications will be issued from Nov 5 - Nov 20 for investing in bonds backed by purchase of gold by the RBI on behalf of the government. Depending on the demand the Government may decide to close this early. Bond will be issed on Nov 26 2015

  •  Investors can buy a minimum of  2 grams and a maximum at 500 grams per year. The Reserve Bank has fixed the public issue price at Rs 2,684 per gram for the sovereign gold bonds .In case of joint holding, the limit applies to the first applicant

  • A fixed rate of interest of 2.75 per cent per annum (payable every 6 months) on the initial value of investment.

  • The bonds have a maturity period of 8 years, with exit option being offered from the fifth year. Holdings can be redeemed in multiples of one gram. The redemption price will be based on prevailing gold prices at the end of the tenure. In the event that the price of gold has decreased, them an option to extend the tenure will be offered.

  • Gold bonds will be sold through banks and designated post offices. They can be used as collateral for loans from financial Institutions.

  • TDS (tax deducted on source) is not applicable on the interest component, but interest earned on gold bonds will be added in taxable income. Capital gains will be taxed at tax slab if these bonds are sold before 3 years. If sold after 3 years, capital gain tax of 20 per cent with indexation benefits would apply.

  • Gold bonds will be sold through banks and designated post offices. They can be used as collateral for loans from financial Institutions. They can be held in demat form as well. ASBA option in Kotak Mahindra Bank(KMB) has already been opened for investment in online mode.

  • The bonds will be listed on the exchanges so investors may get an option to exit even before five years.

  • Advantage over mutual funds and other ETFs is benefit of no expense ratio.

  • This can be suitable to hedge your portfolio against overall risks.
  • Price of the Bonds shall be fixed in Indian Rupees on the basis of the previous week’s (Monday – Friday) simple average closing price for gold of 999 purity, published by the India Bullion and Jewellers Association Ltd. (IBJA).
  • The relevant notification is available on the RBI site. https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10095&Mode=0 and on the Finance Ministry website at http://finmin.nic.in/swarnabharat/sovereign-gold-bond.html
Location: India

Comments

Post a Comment

Popular posts from this blog

Swachh Bharat Cess @0.5% - Applicable on all services as per Service Tax from Nov 15 2015

The government of India in order to encourage cleanliness has introduced the Swachh Bharat Cess @0.5% to use for such purposes.  For such a vast and populous country we do have our fair share of cleanliness concerns. In fact, persons entrusted with the job of keeping our country clean, struggle constantly. Cleanliness also has huge impact on public health. Dirty surroundings also cause many diseases, like, malaria, dengue, diarrhea, jaundice, cholera etc., with associated high public health expenditure. According to the Government of India estimates, expenditure on health adds up to Rs.6,700 crore annually (approximately Rs.60 per capital). Increased allocation for Swachh Bharat Abhiyan can prevent many of these diseases with consequential benefit to one and all.  So your telephone , insurance ,eating out will all be included with such a cess from Nov 15 ie 50 paise for every 100 rupees and is set to be a bit more expensive. Relevant notification is as follows. ...
Read more

Which Income Tax Return Form to Fill - A Simple Guide

The income tax returns have to filed with the government in a prescribed format . The following allows you to select the appropriate form applicable for you. ITR - 1 (SAHAJ) This form is applicable for mostly salaried class of people. If you are getting salary or pension income                  rent or occupying in one house property                  exempt income (agricultural income upto Rs 5000)                  other income like fd interest (other than lottery/horse race winnings) ITR - 2A In addition to the above, if you are getting                   agricultural income above Rs 5000                   income or loss from more than 1 house property                   lottery/horse race winnings ITR ...
Read more