RBI has given great news to Indian sovereign gold bond investors. The Reserve Bank of India on Wednesday fixed the redemption value of two old Sovereign Gold Bond (SGB) series. This money will be given to those investors who had purchased SGB 2017-18 series launched on 11 December 2017. At that time the price of one unit was only Rs 2,954, that is, now after 8 years, a direct profit of about Rs 9,847 is being made on one unit, which means complete benefit from the increase in the price of gold.
The best thing is that this bond has been earning 2.5% interest every year, which was credited to the account every six months. That means the investor got the benefit of increase in the price of gold and on top of that he also got regular income. Overall, whoever took this bond in 2017 will benefit the most from it.
This is the new redemption value
The Sovereign Gold Bond Scheme was started by the Central Government and RBI so that the habit of purchasing physical gold in the country reduces, because India is the largest gold importing country in the world. With this bond, people get a safe way to invest in gold digitally, there is no tension of keeping gold, no fear of theft and on top of that they also get interest.
Now the new redemption value of Rs 12,801 per unit declared by RBI has brought a huge benefit to those investors who had bought these bonds at a lower price seven-eight years ago. Today they are getting good returns as per the current market price, that is, the old investment has turned into gold today.
What is SGB Scheme?
This bond gives an interest of 2.5 percent every year, which is credited to your account every six months. The tenure is of eight years, but it can be withdrawn before the fifth year, that too on interest days. If you want to sell quickly, you can sell it in the secondary market after 14 days, but the price will depend on the gold market. On maturity i.e. after eight years, the redemption value will be given as per the current price of gold, which is calculated from the three day average closing price decided by IBJA. Similarly, the price is also decided on the average of three days.
Will also get exemption from tax
Tax exemption is also a big benefit. If you hold for full eight years then there will be no capital gains tax at all. Tax has to be paid on interest as per the income tax slab, but if sold before three years, short term gain tax will be applicable. These bonds can be kept in demat account, up to 75 percent of the value can be pledged for loan. The best thing is that since there is government backup, there is no risk, no fear of theft, no hassle of storage. Capital gain is also available when the price of gold increases.
