Sovereign Gold Bonds 2023-24 Series-IV tranche: Benefits, features of SGB

The Sovereign Gold Bonds (SGB) 2023-24 Series-IV is now open for people to buy from February 12, 2024, until February 16, 2024. After you buy, it usually takes seven days for the bonds to be given to you. For this series, that will be on February 21, 2024.

The bond is valued at Rs 6,263 for each gram of gold. This value is determined by calculating the average closing prices of gold with 999 purity over the last three working days before the subscription period, which are February 07, February 08, and February 09, 2024.After a discount of Rs 50 per gram less than the nominal value for investors who apply online, the issuance price of the Gold Bond would be Rs 6,213 per gramme of gold.

Also read: Latest Sovereign Gold Bond tranche open for subscription: 5 ways to invest in SGB 2023-24 Series-IV

Also read: Know the latest SGB tranche issue price

SGB details

Individuals, families, trusts, universities, and charitable organizations can invest in SGBs.

SGBs come with a tenure of eight years. After five years, investors can request to withdraw early.

Also read: Today is last day to invest in Sovereign Gold Bonds (SGB) 2023-24 Series-IV: 8 important things to know

There are limits on how much you can buy:

• Individuals can buy up to 4 kg
• Hindu Undivided Families (HUFs) can also buy up to 4 kg
• Trusts and similar groups approved by the government can buy up to 20 kg per year (from April to March).

Also read: Last chance to invest in SGB for this FY: When is the last date to invest in Sovereign Gold Bonds 2023-24 - Series IV

Sovereign Gold Bond Features

Here are some important features of the Sovereign Gold Bond, as per the ICICI Bank website.

• Eligibility: The SGBs will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable institutions. For online application through ICICI Bank, the bonds are for sale to only 'individuals' through the Internet Banking Channel and iMobile App. Customers falling into other category of investors may however approach the branch and fill-up the application form to apply for the tranche.
• Denomination: The bonds will be denominated in units of one gram of gold and multiples thereof.
• Minimum size: Minimum permissible investment will be 1 gram of gold.
• Maximum limit: Maximum limit of subscription shall be of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government from time to time
• Interest rate: The investors will be paid Interest on the amount of initial investment at the rate notified by RBI for a particular tranche at the time of its launch and is payable semi-annually.
• Tenor: The tenor of the bond will be for a period of 8 years with an exit option from 5th year onwards to be exercised on the interest payment dates.
• Redemption: Redemption price shall be fixed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.

Also read: Tax free premature redemption of Sovereign Gold Bond (SGB) is allowed only within this 21-day annual window

Sovereign Gold Bond Benefits

Now let us take a look at the benefits of investing in SGBs, as per the ICICI Bank website.

• Hassle free: Ownership of gold without any physical possession (No risks and no cost of storage)
• Tax treatment: The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.
• Tradability: Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
• Transferability: Bonds shall be transferable by execution of an Instrument of transfer in accordance with the provisions of the Government Securities Act.