Investment in Sovereign Gold Bond (SGB) for 2021-22

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Investment in Sovereign Gold Bond (SGB) for 2021-22

Last Updated on November 29, 2021 by Chitale CFS Pvt Ltd

A number of clients have shown interest in investing in the Sovereign Gold Bond (SGB) and we have received quite many queries with respect to investment in Sovereign Gold Bond Scheme, so here is a consolidated list of all queries and answers:

What is the subscription period for Sovereign Gold Bond (SGB)?

RBI has announced the next 4 tranches for the issue of Sovereign Gold Bond (SGB). Below are the dates for subscription from October 2021 to March 2022.

Sovereign Gold Bond (SGB) Tranche VII dates: 25th to 29st October 2021

Sovereign Gold Bond (SGB) Tranche VIII dates: 29th November to 3rd December 2021

Sovereign Gold Bond (SGB) Tranche IX dates: 10th to to 14th January 2022

Sovereign Gold Bond (SGB) Tranche X dates: 28th February to 8th March 2022

The sovereign gold bonds will be issued in four tranches as per the calendar shown below: 

SN Tranche Date of Subscription Date of Issuance
1 2021-22 Series VII October 25 – 29, 2021 November 02, 2021
2 2021-22 Series VIII November 29- December 03, 2021 December 07, 2021
3 2021-22 Series IX January 10-14, 2022 January 18, 2022
4 2021-22 Series X February 28- March 04, 2022 March 08, 2022

What is the issue price per gram?

Issue price per gram for Tranche VIII will be Rs. 4791 per gram. In case you are applying online and paying through digital mode, the issue price per gram for Trance will be discounted (₹ 50/- discount on digital applications and payment).

The issue price will be different for each of the next tranches and will be announced by RBI at the beginning of each subscription period.

Is there any investment limit for individual investor?

Investment limit for individual investor is minimum 1 gram and maximum 4 kg.

Is Demat account mandatory for Sovereign Gold Bond (SGB)?

Yes, Demat account is now mandatory for SGB.

How much interest will I receive?

Interest to be received @ 2.5% per annum, payable half yearly.

May I invest in gold bonds through SIP or it is a one time payment?

No SIP, one-time payment during the subscription period.

When will I receive the maturity amount?

Maturity amount will be received after 8 years at the rate prevailing that time.

Will I get exemption from Capital Gain Tax?

Exempt from Capital gain tax, only if held till maturity (8 years)

Is there any option to exit?

Yes, option to exit from the 5th year

Do I get 80C tax benefit for investing in Gold Bond?

No 80C tax benefit for SGB. The interest on the gold bond shall be taxable as per the provisions of the Income-Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of these bonds to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on transfer of bond. 

Do I need to hold physical gold if I invest in gold bonds?

You do not need to hold physical gold in case of gold bonds. Holding Certificate will be issued towards investment and not the physical gold. It is one of the advantages of buying gold digitally through sovereign gold bonds.  

Do you get Loan against Sovereign Gold Bonds?

The gold bonds issued under this scheme may be used as collateral security for availing any loan. Such loans could be granted by marking lien on SGB appropriately. The Loan to Value ratio as applicable to any ordinary gold loan mandated by the Reserve Bank of India shall also apply to the Bonds issued under this Scheme. 

Please note that we continue to recommend Mutual Funds for investments period of 8 years. We suggest to buy gold bonds (SGB) only if you are buying gold as an investment from market, as Sovereign Gold Bond Scheme seems to be far better option considering the elimination of cost of storage and making charges. However, if anyone is keen to have Gold investment in their portfolio, it should be around 5-10 % and not more than that.

Why Chitale CFS Pvt Ltd?

Chitale CFS Pvt Ltd offers wide variety of investment avenues for short as well as long term investment needs. With more than 30+ years of experience, we are one stop solution for a number of financial products like Mutual Funds, Insurance, Bonds, Fixed Deposits etc. We serve our clients with highest standard of transparency and integrity by putting investor’s interest first.

You can contact us by calling on +91 8999116127/ +91 9082549108 or email us at sunil@chitalecfs.com  or sayali@chitalecfs.com

Mutual fund investments are subject to market risks. Please read the offer document carefully before investing

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