Investment

Published: June 21, 2023
Updated: June 21, 2023

"Sovereign Gold Bonds: Your Guide to the 2023-24 Scheme"

Introduction to Sovereign Gold Bond Scheme:

The Indian government is set to launch two tranches of Sovereign Gold Bonds (SGBs) in the first half of 2021. The first tranche is now open for subscription from 19th to 23rd June, while the second tranche will open from 11th to 15th September. These bonds offer investors a regulated and secured avenue to invest in gold as an asset class.

Key Details of the Scheme:

Under the Sovereign Gold Bond Scheme 2023-24, the price for Series-I is fixed at ₹5,926 per gram. This scheme has been instrumental in helping the Reserve Bank of India (RBI) raise over ₹30,000 crore since its inception in November 2015. The dematerialized form of the bonds allows for convenient holding in a demat account, eliminating concerns about impurities and deductions associated with physical gold.

Benefits and Features of Sovereign Gold Bonds:

Investing in Sovereign Gold Bonds offers several advantages. It provides high liquidity, eliminates storage costs, and is easier to sell compared to physical gold. Retail investors also stand to gain a 2.5% annual interest on their investment until the maturity of the bonds. Furthermore, applicants applying online and paying digitally can avail a discount of ₹50 on every gram of gold. The bonds also come with interest coupons payable semi-annually.

Advantages and Tax Benefits:

Sovereign Gold Bonds have the advantage of being listed on exchanges, which ensures liquidity and allows investors to redeem them from the fifth year onwards. One of the key benefits of this asset class is the complete exemption from taxation on capital gains realised upon maturity after eight years. This exemption makes Sovereign Gold Bonds an attractive option for long-term investors.

Why Should Retail Investors Consider SGBs?

According to experts, the Sovereign Gold Bond scheme offers retail investors a secure and interest-bearing investment in gold. It allows them to diversify their portfolios and benefit from the long-term potential of this precious metal. With its ease of access, purity assurance, interest earnings, and tax benefits, the scheme presents an enticing opportunity for investors looking to harness the potential of gold as a long-term investment.

Where to Buy Sovereign Gold Bonds?

Investors can purchase Sovereign Gold Bonds through scheduled commercial banks, the Stock Holding Corporation of India Limited (SHCIL), the Clearing Corporation of India Limited (CCIL), designated post offices (as notified), and recognized stock exchanges either directly or through agents.

The Sovereign Gold Bond Scheme for 2023-24 provides retail investors with a secure and regulated investment opportunity in gold. With attractive features such as high liquidity, interest earnings, and tax benefits, these bonds offer a compelling option for diversifying investment portfolios and tapping into the long-term potential of gold. Investors can make their purchases through various authorised channels, ensuring easy access to this valuable asset class.