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Sovereign Gold Bond Series VI Opens; Good Alternative To Physical Gold On Dhanteras

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On Monday, the Government of India rolled out the sixth tranche of sovereign gold bonds. The Sovereign Gold Bond (SGB) Scheme 2019-20-Series VI will close for subscription on Dhanteras, that is, 25 October.

The Finance Ministry in its statement said that the issue price for the subscription is set at Rs 3,835 per gram. The Settlement Date is set on 30 October 2019.

Sovereign Gold Bond Series VI Opens; Alternative To Physical Gold This Dhanteras
 

The statement also said that Rs 50 discount per gram will be given to those who apply for the bond subscription online and also make the payment online.

"Government of India in consultation with the Reserve Bank of India has decided to allow discount of Rs 50 (Rupees Fifty only) per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors the issue price of Gold Bond will be Rs 3,785 (Rupees Three Thousand Seven Hundred Eighty Five only) per gram of gold" the statement said.

Here's How Sovereign Gold Bonds Are Taxed

These bonds are good alternatives to investing in physical gold on the auspicious occasion of Dhanteras.

One can invest for as little as one gram. These also bear interest from the date of issue at the rate of 2.50 percent (fixed rate) per annum on the nominal value. Interest is credited to the investor's bank account semi-annually.

Sovereign Gold Bonds are issued by the Reserve Bank India on behalf of Government of India.

These are sold through scheduled commercial banks (except small finance banks and payment banks), SHCIL, designated post offices, NSE and BSE.

In addition to gains from changes in the metal's prices, these bonds earn interest (coupon) income if held till maturity. These bonds mature in eight years and come with exit option after the fifth year to be exercised on the interest payment dates.

 

SGBs are tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI. This means that even if you fail to participate in the current issue, you can purchase them or bonds from previous issues on NSE or BSE through a registered stockbroker from subscribers who wish to sell them. Similarly, one can also exit by selling the bonds at the exchanges before maturity.

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