The government on Friday announced that it will unveil the first tranche of sovereign gold bonds or popularly referred as SGBs for this fiscal year just two days ahead of the auspicious Akshaya Tritiya festival on April 16. The subscription for SGBs will also commence from the same day.
Features of SGB 2018-19 Series I
1. Subscription to the SGBs will be accepted from April 16 to April 20 and the certificate shall be issued after a fortnight time on May 4.
2. The SGBs can be obtained from designated banks, post offices, SHCIL and recognized stock bourses that include NSE and BSE.
3. SGBs denominated in units of 1 gm of gold and in multiples thereof can be obtained with a maximum limit of subscription of 500 grams per person per fiscal year (April-March).
4. An individual and HUF account can invest a maximum of 4 kg whereas trust and similar entities can invest 20 kgs on a fiscal year basis. It is to be noted that subscription limit stands valid for both the purchases made through the subscription offer plus from the secondary market.
5. Investor can also invest online with a discount of Rs. 50 on the issue price of SGB
6. Holding can be maintained either in physical or demat form.
7. Bonds will be available for trading on the bourses within a fortnight as per the date notified.
8. The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.
9. In case of redemption which is allowed from the fifth year, payment will be made in cash upto Rs. 20000 and then by cheque, DD or e-banking.
10. Bonds will serve as loan collateral. The loan-to-value ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
11. Price of bond will be fixed in domestic currency 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.
12. There is no capital gains tax on the redemption of SGBs.
With PTI Inputs