Sovereign Gold Bond 2016-17 – Series III – Tranche VI issue at discounted price

Sovereign Gold Bonds Oct 2016 -Series 3 - Trache VI ReviewSovereign gold bonds issued in last Tranches (Lots) are trading at a premium on stock exchanges.. Govt of India has decided for Gold Bond 2016-2017 – Series III to open on 24th October, 2016. This time, Govt. of India offers Rs 50 per gram discount. What are the features of Sovereign Gold Bond Oct 2016 Series III – Tranche VI? How to apply for these bonds? Should you invest in Sovereign Gold Bond Scheme? In this article, I would provide complete review of this.

Sovereign Gold Bond 2016-17 – Series III – Tranche VI


These Sovereign Gold Bonds of October 2016 would open for subscription from 24th October and closes on 2nd November, 2016.

Resident Indians are eligible to apply for this Sovereign Gold-Bond-Scheme.

Also Read: Double your investment in 18 months by investing in Bangalore real estate property – What are hidden factors?

These are issued by Government, hence these are safe investment options.

These gold bonds would be issued on 17th November, 2016 after subscription is closed. It would be issued in physical form or demat form.

Sovereign Gold Bonds are issued in denomination of 1 gram of gold and in multiples of 1 gram with a maximum quantity of 500 grams per person per financial year i.e. Apr to Mar period.

These bonds would carry 2.5% interest rate per annum, which is payable every half year.

Price of the bond would be decided based on the price of the gold pertaining to previous Friday’s rate of 999 purity gold price published by Indian Bullion and Jewellers Association Ltd. They have fixed Rs 3,007 price per gram  and after discount of Rs 50 per gram, this is issued to the general public at Rs 2,957 per gram.

Tenure of the sovereign gold-bond scheme is 8 years. One can exit from these bonds after 5 years from the date of subscription either after completion of 5 years, 6 years of 7 years.

You can get a loan against the bonds from banks.

How to apply for Sovereign Gold Bond 2016-17 – Series III – Tranche VI?


Banks, specific Post Offices and Stock Holding Corporation of India are authorized to accept applications under Sovereign Gold bond scheme. You can approach, fill the application and submit them between 24th October, and 2nd November, 2016. However, gold bond certificates / demat units would be issued / allocated only on 17th November, 2016.

Can we withdraw Sovereign Gold-Bonds before the maturity period?


These bonds have a lock in period of 8 years. However, one can do premature withdrawal after completion of 5 years, 6 years or 7 years and during interest date periods. If your interest date is 17th May (6 months from 17th November date), you can withdraw after 5 years and on 17th May or 17th Nov.

What about the tax treatment of Sovereign Gold Bond 2016-17 – Series III – Tranche VI?


While you would get 2.5% interest per annum on these bonds, this is not tax free. You need to club this interest with your income every year and pay income tax on that based on income tax slab.

These are exempted from capital gain arising from selling these bonds. Means, whatever returns you would get at the time of redemption (apart from interest) is tax free.

Long term capital would be computed for transfer of these bonds to any other person based on indexation benefits.

Also Read: Revised Post Office Interest rates from Oct 2016

Are these Sovereign Gold Bonds are traded on stock exchanges?


These are tradable on NSE and BSE. However RBI would notify the date of trading of such bonds at later point of time.

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Suresh

Sovereign Gold Bond 2016-17 – Series III – Tranche VI

7 comments

  • Dhaval

    i have applied for Sovereign Gold bond series iii (6 trench) but still i do not get bond in my demate account.Can any body tell when i will get? allocation started or not?

  • Rajagopal

    Nice write-up and thanks for the same.

    How will the 2.5% interest be paid to us, credited to our bank a/c or how ?

    I am yet to receive any interest for the investment made in the 1st tranche of the same.Where to look ?

    Thanks.

  • cheepulla gangadhar

    I heard SSA interest rate governed by govt of India. So why a postal Dept can reduce it….? By this way investors will be in loss.. .

    Please reply sir

  • Tanveer Singh malik

    If i sale these after 8 yrs and that time if the price of gold is ex. 60000/10gms would these be sold at that price or at the price i buy today?

  • Rajat

    So in your view, should we invest in the Sovereign bonds?

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