Sovereign Gold Bond Scheme 2022-23 Series II
The second series of the sovereign gold bond (SGB) for the financial year 2022-2023 opened on August 22. The issue is open till August 26. The bonds will be issued on August 30.
The bond has a tenure of eight years. After the end of five years, you have the option to surrender them on the interest payment dates.
Each bond will track the price of one gram of gold. The price at the time of the issuance is Rs 5,197 per gram. If you pay using digital means, there is a discount of Rs 50 per gram i.e, Rs 5147 per gram. The bond pays an interest of 2.5 percent per annum, payable half-yearly, on the price at the time of the issue.
The interest is taxable in the hands of the investor. At the time of redemption, the then prevailing price of gold per gram is paid as the maturity value. If you hold till maturity, capital gains are tax-free. Since the bonds trade on the stock exchanges, they can be sold.
In such cases, investors can avail indexation benefits while computing long-term capital gains, if the bonds are held for more than three years and pay tax at 20 percent.
Sovereign Gold Bond is the only well-regulated gold-linked instrument that pays regular interest. Since it is backed by sovereign, it is an effective way to take exposure to gold prices
You should hold them till maturity to ensure tax-free gains.
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