The Government  is launching its  4th Sovereign Gold Bonds (SGB) from 18 July  to 22 July 2016. Issue price for the 4th tranche has been fixed at  Rs. 3,119 per gram.

Issue Details

Gold BondSovereign Gold Bond 2016-17 Tranche 1
Issue Open18 July 2016
Issue Close22 July 2016
Issuance Reserve Bank of India on behalf of Govt of India
Tenor8 Years (Exit option from 5th year)
Price BandRs. 3,119 per gram
Maximum Limit500 grams per person per fiscal year (Apr-Mar)
Interest RateFixed Rate 2.75% per annum payble semi-annually on the initial value of investment
CollateralBond can be used as collateral for loans.
Tradability (Liquidity)Bonds will be tradable on Exchange
Tax TreatmentThe Interest on Gold Bonds shall be taxable. The capital gain tax arising on redemption of SGB to an individual has been exempted.
Indexation The Indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.
NRI not allow to Invest

Comparison

Comparision of Physical Gold, Gold ETF  & Sovereign Gold Bonds :

Physical GoldGold ETFSovereign Gold Bond
ReturnsLower than Actual Return on goldLower than Actual Return on goldHigher than Actual Return on gold
SafetyRisk on handling physical goldHighHigh
Purity of GoldPurity of gold always remains a questionHigh as it Electronic FormHigh as it Electronic Form
Wealth TaxWealth Tax applicable @ 1% on the total valuation of the asset every yearNot ApplicableNot Applicable
Capital GainLong term Capital Gain Tax applicable after 3 yearsLong term Capital Gain Tax applicable after 3 yearsLong term Capital Gain Tax applicable after 3 years ( No Capital Gain Tax if held till maturity)
Collateral Against LoanYesNoYes
Storage CostHighVery lowVery low

 Listing Details

Collection Center @ Pune

7, Omkar Corner, opp Cosmos Bank ,

Tilak Road, Sadashiv Peth,

Pune 411030

Mobile:  77 1991 7444