Sovereign Gold Bond Scheme 2022-23
By PIB Delhi
The Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds in tranches as per the calendar specified below:
S. No. Tranche Date of Subscription Date of Issuance 1. 2022-23- Series III December 19 – December 23, 2022 December 27, 2022 2. 2022-23 Series IV March 06 – March 10, 2023 March 14, 2023
The Sovereign Gold Bonds (SGBs) will be sold through Scheduled Commercial banks (except Small Finance Banks, Payment Banks and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The features of the Bond are as under:
Sl. No. Item Details 1 Product name Sovereign Gold Bond Scheme 2022-23 2 Issuance To be issued by the Reserve Bank of India on behalf of the Government of India. 3 Eligibility The SGBs will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions. 4 Denomination The SGBs will be denominated in multiples of gram(s) of gold with a basic unit of one gram. 5 Tenor The tenor of the SGB will be for a period of eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable. 6 Minimum size Minimum permissible investment will be One gram of gold. 7 Maximum limit The maximum limit of subscription shall be 4 Kg for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal year (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include SGBs subscribed under different tranches, and those purchased from the Secondary Market, during the fiscal year. 8 Joint holder In case of joint holding, the investment limit of 4 Kg will be applied to the first applicant only. 9 Issue price Price of SGB will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the week preceding the subscription period. The issue price of the SGBs will be less by ₹50 per gram for the investors who subscribe online and pay through digital mode. 10 Payment option Payment for the SGBs will be through cash payment (upto a maximum of ₹20,000) or demand draft or cheque or electronic banking. 11 Issuance form The SGBs will be issued as Government of India Stock under Government Securities Act, 2006. The investors will be issued a Certificate of Holding for the same. The SGBs will be eligible for conversion into demat form. 12 Redemption price The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity, of previous three working days published by IBJA Ltd. 13 Sales channel SGBs will be sold through Scheduled Commercial banks (except Small Finance Banks, Payment Banks and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices (as may be notified) and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited, either directly or through agents. 14 Interest rate The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value. 15 Collateral Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time. 16 KYC documentation Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required. Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to individuals and other entities. 17 Tax treatment The interest on SGBs shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual is exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond. 18 Tradability SGBs shall be eligible for trading. 19 SLR eligibility SGBs acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio. 20 Commission Commission for distribution of the bond shall be paid at the rate of one per cent of the total subscription received by the receiving offices and receiving offices shall share at least 50 per cent of the commission so received with the agents or sub agents for the business procured through them.