Sovereign Gold Bonds Mar 2016 – Tranche-III – Review
With investors showing good interest, Govt. of India is opening Tranche-III of Sovereign Gold Bond Scheme in Mar-2016. These Sovereign Gold-Bonds scheme of Mar 2016 would open for subscription from 8th March. This year Govt. of India has indicated in its Budget 2016-2017 to give income tax exemption on capital gains of these bonds which applies to earlier issues too. What are the features of Sovereign Gold Bond Scheme March 2016 – Tranche-III? How to apply for these bonds? How investors would get benefited from capital gains indicated in this year budget 2016-17.
Features of Sovereign Gold Bonds March 2016
- These Sovereign Gold Bonds March 2016 would open for subscription from 8th March and closes on 14th March, 2016.
- Resident Indians are eligible to apply for this Sovereign Gold-Bond-Scheme.
- These are issued by Govt. of India, hence safe for investment.
- These gold bonds would be issued on 29th March, 2016 after subscription is closed. It would be issued in physical form or demat form.
- Sovereign Gold Bonds are issued in denomination of one gram of gold and in multiples of one gram with a maximum subscription of 500 grams per person per fiscal year i.e. Apr to Mar period.
- These bonds would carry 2.75% 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 2,916 price per gram yesterday for this gold bond scheme for Tranche-III.
- Tenure of the sovereign gold-bond scheme is 8 years. One can exit from these bonds after 5 years from the date of subscription.
- You can get loan against the bonds from banks.
How to apply for Sovereign Gold Bonds March 2016 – Tranche-III?
Scheduled Commercial Banks and designed Post Offices are authorized to accept applications under Sovereign Gold bond scheme. You can approach, fill the application and submit them between 8th March and 14th March, 2016. However, gold bond certificates / demat units would be issued / allocated only on 29th March, 2016.
Can we withdraw Sovereign Gold-Bonds before maturity period?
Tenure of these bonds is 8 years. However, one can do pre mature withdrawal after completion of 5 years and during interest date period. If your interest date is 29th Sep (6 months from 29th March date), you can withdraw after 5 years and on 29th Mar or 29th Sep.
What about the tax treatment of Sovereign-Gold Bond Scheme of 2016?
There are two points in tax aspect.
- While you would get 2.75% 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.
- This budget 2016 has provided exemption of capital gain arising from selling these bonds. Means, whatever returns you would get at the time of redemption (apart from interest) is tax free.
Are these Sovereign Gold Bonds are traded on stock exchanges?
These bonds are tradeable, however RBI would notify the date from which, these bonds would be traded.
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Sovereign Gold Bonds Mar 2016 – Tranche-III
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