The next tranche for Sovereign Gold Bond opened at the rate of Rs. 6,263 per gram for subscription on the 12th of February 2024 according to the Reserve Bank of India or RBI. the scheme is open for subscription until the 16th of February 2024. Starting from the 12th of February 2024, the fourth series in the Sovereign Gold Bond Scheme will close after five days. It is a tempting choice in India as everyone loves adding gold to their portfolios and with the recent tranches they are an excellent opportunity to invest.
Online Subscription Discount on Sovereign Gold Bond Scheme
The investors applying online for series four of the scheme and making payments from digital mode will get a discount of Rs. 50 per gram. This discount lowers the issue price to Rs. 6,213 as per the Reserve Bank of India from the rate of Rs. 6,263. The Sovereign Gold Bonds are set to be sold through various channels which also include scheduled commercial banks, post offices as well as stock exchanges.
Taxation on the Gold Bonds under the Sovereign Gold Bonds Scheme
The Sovereign Gold Bonds have a tenor for eight years with an option of premature redemption after the fifth year. The interest is paid at a fixed rate of 2.50 percent per annum and is taxable fully however the profits made on redemption are fully tax-free. This rule for profits on redemption applies at the end of the original tenure of the eight years as well as on early redemption that can be done after five years. This exemption is applicable no matter whether you acquire the Sovereign Gold Bonds as an original subscriber or buy it from a secondary market. This exemption on redemption is applicable only to an individual and does not apply to other entities that are allowed to invest in the Sovereign Gold Bonds according to a tax and investment expert based in Mumbai known as Balwant Jain.
Transfer or Selling of Bonds
In case the bonds are sold or transferred, the profits made on the sale of such bonds become sully taxable as long-term and short-term depending on the holding period which is for twelve months or a year for the Sovereign Gold Bonds to be counted as long-term capital assets. If they are sold or transferred after this period the individual is entitled to claim the benefit of indexation all the while computing the taxable long-term capital gains. They will also have an option of paying a flat tax of 10 per cent of the profit if it is more beneficial than the indexing capital gains. There is also an option for you to claim an exemption under Section 54F for these long-term capital gains by investing the proceeds in a residential house within a specified time.
