Sovereign Gold Bond: To invest in gold, you do not need to buy only gold coins or gold jewelery. There are other ways to invest in gold or gold.
Let us know in detail about Gold Bonds in this post.
Some important things about Sovereign Gold Bond
- In gold bonds, you get interest of 2.5% per annum. You do not get interest in any other investment method of gold.
- If you want to invest, you have to buy at least one unit (1 gram).
- You can buy a gold bond equal to a maximum of 4 kg of gold (4000 units) in one year (April to March).
- Gold bonds are issued by the Government of India. So you don’t have to worry about your money. Gold bonds are guaranteed by the Government of India.
- A unit of gold bond is equivalent to one gram of gold.
- Gold bonds mature after 8 years. After 8 years, the money will be returned to you according to the value of the gold at that time.
- Although gold bonds are matured in 8 years, you can take your money by returning your bonds at the appointed time in the fifth, sixth and seventh year.
- You can also take a gold loan by pledging a gold bond.
- Gold bonds will also be listed on the stock exchange. From there you can buy or sell gold bonds.
Lets understand with the help of an example
Suppose you bought 100 units of gold bonds. That means you bought 100 grams of gold. At the time of purchase, the price of gold was running at Rs 2,800 per gram (Rs 28,000 tola). You invested Rs 2.8 lakh in total.
You will get interest of 2.8 lakh X 2.5% = Rs 7,000 every year. Note that you will get interest of Rs 3,500 every 6 months.
After 8 years, the money will be returned to you according to the value of the gold at that time. Suppose the value of gold at that time is weighed Rs 30,000. In this case, you will get 100X3,000 = 3 lakh rupees for 100 gram of gold. If the value of gold is Rs 26,000, then you will get Rs 2.6 lakh.
You have to bear the risk of fluctuating gold prices.
What is the tax payable on selling gold bonds?
You have to pay tax according to your tax bracket on the interest of gold bond.
If you return the gold bond to the government (after 8 years of maturity or before), then you will not have to pay any tax on the profits. As if you had invested 2.8 lakhs and you get 3 lakhs back after 8 years, then you do not need to pay tax on this amount.
If you sell gold bonds on the stock exchange, then you have to pay tax. If you sell before 3 years, you will have to pay tax according to your tax slab on profits. If you sell after 3 years, you will have to pay 20% (after indexation) tax.
How to buy Sovereign Gold Bond?
Government of India issues Sovereign Gold Bonds from time to time.
You can buy gold bonds with the help of your bank or with the help of your broker. You can also apply online.
If desired, you can buy or sell sovereign gold bonds on the stock exchange.
When you invest in these bonds, apart from the benefits of rising gold prices, these bonds also pay 2.50 percent interest annually. This interest is paid in six months.
Subscription Limit: The minimum limit for investment in these bonds is one gram. At the same time, the maximum subscription limit per financial year per person is 500 grams. The investment limit for Hindu Undivided Family .
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