Sovereign Gold Bond 2015-16 – Highlights & Information

The Reserve Bank of India (RBI) in consultation with Government of India (GOI) has announced about the issue of “Sovereign Gold Bonds” .

The highlights and features of this Sovereign Gold bonds (2015-16) is as follows :-

Sl NoItem/FeatureDetails
1Date of Issue of BondsThese bonds will be issued on Nov 26 2015
2Application PeriodApplication will be accepted from 5th Nov 2015 to 20th Nov 2015
3Place of SalesThese bonds will be sold through banks and designated post offices, as may be notified
4Name of the BondSovereign Gold Bond
5IssuanceTo be issued by Reserve Bank India on behalf of the Government of India
6Who can apply?Resident Indian entities including Individuals, HUFs, Trusts, Universities, Charitable Institutions
7DenominationMultiples of Grams of Gold. Minimum 2 Grams and maximum 500 grams per person per financial year
8Tenor of the BondThe Tenor of the bond will be 8 years, but there will be an exit option at the end of 5 years.
9Issue PriceThe present issue is priced at 2684/- at present and the further issues to be priced at rates to be notified based on the prevailing market rate.
10Payment optionFund Transfer/Cash/Cheque/Demand Draft.
11Form of CertificateThe investors will be issued a Stock/Holding Certificate. These can be converted into demat form also.
12Redemption PriceThe redemption price will be in Indian Rupees based on previous week’s (Monday-Friday) simple average of closing price of gold of 999 purity published by IBJA.
13Rate of InterestThe investors will be compensated at a fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment.
14CollateralBonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
15KYC RequirementsKnow-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.
16Tax TreatmentThe interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the capital gains tax shall also remain same as in the case of physical gold.
17TradeabilityBonds will be tradable on exchanges/NDS-OM from a date to be notified by RBI.

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