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  • Category: Miscellaneous

    Important news for gold investors

    The Government of India has started issuing Sovereign Gold Bonds 2017-18 (Series-III). Applications for the bond are being accepted from October 09, 2017 to December 27, 2017. The bonds are being issued on the succeeding Monday after each subscription period. Some of the important highlights of the Sovereign Gold Bonds are mentioned below:-

    (a) Issued by: The bonds are issued by Reserve Bank India on behalf of Government of India.
    (b) Who are eligible to purchase: The bonds can be purchased by resident Indian entities including individuals, HUFs, trusts, universities and charitable institutions.
    (c) Denomination: The bonds will be sold in multiples of gram(s) of gold with a basic unit of 1 gram.
    (d) Minimum limit: Minimum permissible investment will be 1 gram of gold.
    (e) Maximum limit: The maximum limit will be 4 KG for individual investors.
    (f) How to make payment: Payment can be made by cash (maximum of Rs. 20,000/-) or by demand draft or by cheque or by electronic banking.
    (g) Interest rate: Fixed rate of 2.50% per annum payable semi-annually on the nominal value.
    (h) KYC documentation: Required (AADHAR Card and PAN Card).
    (i) Whether can be converted to Demat form: Yes, the bonds can be converted in Demat form.

    Interested investors may apply for this gold bond as early as possible. This scheme will benefit those investors who want to invest in gold but don't like to keep gold in physical form. Please note that applications will be accepted until 27th December 2017.
  • #615319
    Can you explain or project how much will be the return ,say after 5 years?

  • #615320
    Let me calculate. What would be the initial investment?
    Beware! I question everything and everybody.

  • #615328
    1. The issue price would be the price of one gram of gold of 999 purity (closing price on that particular date). Further the issue price of the gold bonds will be Rs. 50/- per gram less for those investors who subscribe online and pay through digital mode.

    2. The investors will get interest at a fixed rate of Rs. 2.50/- per cent p.a. payable semi-annually on the nominal value.

    3. The redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity of previous 3 business days.

    4. So, if an investor purchases gold bond equivalent to 100 grams of gold @ today's closing market price (today's closing IBJA price of gold of 999 purity: Rs. 29670/- per 10 gram), he invests Rs. 296700/- in gold bond.

    5. He will get a compound interest @ 2.5% compounded semi-annually. His return after five years would be Rs. 3,35,944.76/- (Principal+Interest).

    6. At the time of redemption, the investor will get the average of last three days' closing price declared by IBJA.

    Beware! I question everything and everybody.

  • #615350
    sounds attractive for people who want to buy gold legally with a bill and not have the fear of keeping it in physical form. What about the interest earned is it taxable or exempted as capital gains after 1 year?

  • #615352
    Good question from Mr. Natarajan. The interest on gold bonds will be taxable as per the provisions of Income Tax Act, 1961. The capital gains tax on redemption of gold bonds to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bonds.
    Beware! I question everything and everybody.

  • #615371
    Well the interest offered being very low than banks and also coming under the direct glare of government, the takers for this scheme would be less and that is my way of thinking.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #615373
    Mr. Mohan: Do you purchase gold for receiving interest? Or do you purchase gold for appreciation of price in future? The case is exactly same here. Interest is an added incentive.
    Beware! I question everything and everybody.

  • #615376
    If its tax exempted it's good, then interest would be a bonus along the appreciation in the value of Gold over a period of 3-5 years.

  • #615389
    It is good. If we purchase and keep the gold in the house it is very dangerous these days. We have to hire a locker by paying rent from the bank or insure the product by paying the premium. Instead of that, it is better to purchase these bonds. No expenses and you will get some interest and you can redeem at the market price on the day of redemption. A good proposal. Presently the rate of Gold is high. Further, what will be the raise? This point is to be taken into consideration before going for it. Almost the rate now is touching Rs.3000/- per gram. So how much further it will raise is the point to be thought off. Then only we can take a decision on investing on Gold. Once we take a decision on investing on Gold, this scheme will be a good proposal.
    always confident

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