New Tranches of Sovereign Gold Bonds (SGB) 2023-24 Announced: Key Dates and Issue Details

Key Takeaways:

• New tranches of Sovereign Gold Bonds (SGB) 2023-24, Series III and Series IV, have been announced with specific subscription periods and issuance dates.
• Investors will be paid at a fixed rate of 2.50 percent per annum, payable semi-annually on the nominal value of the SGBs.
• SGBs will be denominated in gram(s) of gold multiples, with a fundamental unit of one gram, and will have a tenor of eight years, with an option for premature redemption after the fifth year.
• The maximum subscription limit each fiscal year must be 4 kg for individuals, 4 kg for Hindu Undivided Families (HUF), and 20 kg for trusts and similar entities.

Sovereign Gold Bond Scheme 2023-24: Latest Tranches and Issue Details

The Government of India, in collaboration with the Reserve Bank of India (RBI), has announced the issuance of new Sovereign Gold Bonds (SGBs) in tranches for the Series 2023-24. The SGB Series 2023-24 comprises Series III and Series IV, with specific subscription periods and issuance dates. Here are the key details:

SGB Series 2023-24 Details

How to Buy Sovereign Gold Bonds (SGB) Online

Customers can purchase SGBs through the following channels:

• Scheduled Commercial banks (except Small Finance Banks, Payment Banks, and Regional Rural Banks)
• Stock Holding Corporation of India Limited (SHCIL)
• Clearing Corporation of India Limited (CCIL)
• Designated post offices
• Recognized stock exchanges, such as National Stock Exchange of India Limited and Bombay Stock Exchange Limited

SGB Denomination and Investment Details

• SGBs will be denominated in gram(s) of gold multiples, with a fundamental unit of one gram.
• The tenor of the SGB will be eight years, with an option for premature redemption after the fifth year.
• The minimum allowable investment will be one gram of gold.
• SGBs can be paid for in cash (up to a maximum of 20,000), demand draft, check, or electronic banking.

Issue Price Calculation

The price of SGB will be fixed in Indian Rupees based on the simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the week preceding the subscription period. The issue price of the SGBs will be less by ₹50 per gram for investors who subscribe online and pay through digital mode.

Interest Rate and Tax Treatment

Investors will be paid at a fixed rate of 2.50 percent per annum, payable semi-annually on the nominal value.

The interest on SGBs is taxable under the provisions of the Income Tax Act of 1961 (43 of 1961). However, the capital gains tax on SGB redemption is excluded. Long-term capital gains deriving from the transfer of the SGB will be eligible for indexation advantages.

Maximum Subscription Limit

The maximum subscription limit each fiscal year (April-March) must be:

• 4 kg for individuals
• 4 kg for Hindu Undivided Families (HUF)
• 20 kg for trusts and similar entities, as specified by the Government from time to time.

Investors will be required to sign a self-declaration regarding the maximum subscription limit during the fiscal year, which includes SGBs subscribed under multiple tranches as well as those acquired on the secondary market.

FAQ

Q1: Where can customers buy Sovereign Gold Bonds (SGB)?

A1: SGBs can be purchased through Scheduled Commercial banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognized stock exchanges such as National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Q2: How will the issue price of SGB be calculated?

A2: The price of SGB will be fixed in Indian Rupees based on the simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the week preceding the subscription period. The issue price of the SGBs will be less by ₹50 per gram for investors who subscribe online and pay through digital mode.

Q3: What is the maximum subscription limit for SGBs?

A3: The maximum subscription limit each fiscal year must be 4 kg for individuals, 4 kg for Hindu Undivided Families (HUF), and 20 kg for trusts and similar entities, as specified by the Government from time to time.