InvestorQ : I understand there is an issue of Gold Bonds opening this week. Is it worth investing in these gold bonds?
prachi Patwardhan made post

I understand there is an issue of Gold Bonds opening this week. Is it worth investing in these gold bonds?

Answer
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11 months ago


Yes, you are right that the Series-VI sovereign gold bond (SGB) scheme 2019-20 is currently open and the subscriptions will be closing on October 25th.
You can bid for a minimum of 1 gm of gold through online transaction at Rs 3,835 per gram, which is the price fixed by the government for this issue. Don’t forget that you can get a special Rs.50 discount reducing your cost to Rs.3,785 but this will only be permitted for digital applications and not for physical applications.

The major attraction of these gold bonds is that the investor will also get 2.50% interest on the amount of initial investment, which will take into effect from the date of its issue and will be payable every six months. The government has already clarified that there will be no TDS on the interest paid, although it continues to be a taxable income in your hands. If you hold the SGB till redemption then there is no tax charged on capital gains. However, any early redemption or sale in the secondary market will attract capital gains tax.

An individual can subscribe to a maximum of 4 kg for individual and Hindu undivided family (HUF) but if your family has 4 members then you can go up to 16 KG of gold. The issue will close on October 25, 2019 and allotment will be made on October 30.