Sovereign Gold Bond Scheme – Sep-2016 – 5th Tranche

Sovereign Gold Bond Scheme Sep-2016Sovereign Gold Bond Scheme – Sep-2016 – 5th Tranche


Sovereign gold bonds issued in last 4 Tranches (Lots) are trading at a premium on stock exchanges. With investors showing high interest, Govt. of India has opened Tranche-V of Sovereign Gold Bond Scheme today. Capital gains arising from these bonds are exempted from income tax. What are the key features of Sovereign Gold Bond Scheme – Sep-2016 – Tranche 5? What is the process to apply for these bonds? Should you invest in Sovereign Gold Bond Scheme Sep-2016? In this article, I would provide complete review of this.

Also Read: Gold Mutual Funds gave upto 80% returns – Should you still invest?

Sovereign Gold Bond Scheme – Sep-2016 – 5th Tranche


  • These Sovereign Gold Bonds of September 2016 would open for subscription from 1st September and closes on 9th September, 2016.
  • Resident Indians are eligible to apply for this Sovereign Gold-Bond-Scheme.
  • These are issued by RBI on behalf of Government of India, hence are safe investment options.
  • These gold bonds would be issued on 23rd September, 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 2.75% interest rate per annum payable semi-annually.
  • 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. The issue price of the sovereign gold bond scheme tranche-5 is fixed Rs 3,150 price 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 loan against the bonds from banks.

How to apply for Sovereign Gold Bond Scheme – Sep-2016 – 5th Tranche?


Bonds can be purchased through banks, Stock Holding Corporation of India Limited, designated post offices, NSE and BSE either directly or through agents.

However, gold bond certificates / demat units would be issued / allocated only on 23rd September, 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 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 – Sep-2016?


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.

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: Personal loans Vs Gold Loans – Which one is cheaper?

Are these Sovereign Gold Bonds are traded on stock exchanges?


These are treadable on NSE and BSE. However RBI would notify the date of trading of such bonds at later point of time. Currently these bonds are tradeable from 23rd September, 2016.

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Suresh

Sovereign Gold Bond Scheme – Sep-2016 – 5th Tranche

Suresh KP

12 comments

  1. As per my view trading in Gold is better than Gold Bonds. Bonds gives only 2.75% of interest we can get more than that by gold trading. Gold trading also didn't have certain time bound as gold bonds have we can gain immediate returns when ever we want by trading. I used to trade in Gold by taking the service from SquareIndia Advisory Pvt Ltd which helped me to get better returns what ever the market conditions may be. This only happened by their experience and brief analysis. They also provided me with Live and Local Bullion Rates. So, i would like to suggest SquareIndia Advisory Pvt Ltd. 

  2. Hi
    I have invested for gold bond (through ICICI) in demat form. I have not received any confirmation from RBI or ICICI for issuance of the same. Whom should I contact?

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