Q. Who is Eligible to invest in Sovereign Gold Bond?
A. Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions.
Q. Can a Minor invest in SGB?
A.Yes. The application on behalf of the minor has to be made by his/her guardian.
Q.Whether joint holding will be allowed?
A.Yes, joint holding is allowed.
Q. What are the Know-Your-Customer (KYC) norms?.
A. Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s).
Q. What will be tenor of the Sovereign Gold Bond?
A. The tenor of the bound will be for period of 8 years with exit option after 5th ,6th and 7th year.
Q. Is there any lock in the investment in Sovereign Gold Bond?
A. Yes, lock in of 5 years.
Q. What is the minimum and maximum amount to invest in the Sovereign Gold Bond?
A. Minimum 1 gram , Maximum 4000 grams per fiscal year for Individual/Hindu Divided Family and 20000 grams for Trusts and Similar Entities notified by the government time to time.
Q. Will the issue price of per gram stay constant during the subscription period?
Q. What are the payment options?
A. Only debit to account.
Q. How will the Bond be redeemed?
A. The redemption price will be bases on previous average price of closing gold price for 0.999 purity published by the Indian Bullion and Jewellers Association (IBJA).
Q. What is the assured interest rate?
A. 2.50% p.a. paid semi annually ( Fixed Rate ).
Q. Can NRIs invest in SGB ?
Q. Why should a customer invest in it?
A. Assured return of 2.50% per annum, no need to store physical bars , plus the benefit of application in the Gold Price (If any) at the time of redemption post 5 years.
Q.Can one apply online?.
A.Yes. A customer can apply online through the website of the listed scheduled commercial banks. The issue price of the Gold Bonds will be ₹ 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.
Q. What are the tax implications on i) interest and ii) capital gain?
A. Interest on the Bonds will be taxable as per the provisions of the Income-tax Act, 1961(43 of 1961). Capital gain tax arising on redemption of SGBs to an individual has been exempted on maturity.
Q. Can I get the bonds in Demat form?
A. The bonds can be held in Demat account by making a specific request for the same at the time of application. Till the process of dematerialization is completed, the bonds will be held in RBI’s books. The facility for conversion to Demat will also be available subsequent to allotment of the bond.
Q. Is tax deducted at source (TDS) applicable on the bond?
A. TDS is not applicable on the bond. However, it is the responsibility of the bond holder to comply with the tax laws.
Q.Can one trade these bonds?
A.The bonds are tradable on stock exchanges from the date to be notified by RBI. The bonds can also be sold and transferred as per provisions of Government Securities Act. However, the client would have to approach his / her broker for trading related requirements.