Sovereign Gold Bond Scheme 2021-22 – Series VIII which is open for subscription till 03rd December, 2021 is also… https://t.co/3IhZsOwgs1
— Reservebank of India (@RBI) 1638429571000
The current tranche of SGB will close for investment on December 3, 2021.
till now, bond Banks (except small finance banks and payments banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognized stock exchanges, were sold through National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
Here is a look at how one can register for an RBI Retail Direct Account and what is a Sovereign Gold Bond.
What is RBI Retail Direct Scheme?
Prime Minister Narendra Modi last month announced the inauguration of the RBI Retail Direct scheme, which allows individuals to buy Treasury bills, dated securities, sovereign gold bonds (SGBs), and state development loans (SDLs) directly from primary and secondary markets. Is.
Who can open an RDG account?
Individuals who are retail investors are allowed to open an RDG account. An RDG account can be opened individually or in partnership with any other retail investor who fulfills the conditions. The Foreign Exchange Management Act of 1999 allows non-resident retail investors to purchase government securities; Hence NRIs can also take this route.
How to register for RBI Retail Direct Scheme to invest in Government Securities?
Required details to open RDG account
Individuals can open a Retail Direct Gilt Account by logging on to RBI Retail Direct at https://rbirtaildirect.org.in.
According to the Retail Direct website, an online account can be opened using the following documents:
- person’s pan
- Rupee Bank Account Details
- Email address
- valid mobile number
To register under this scheme, one has to provide these details and complete an online KYC process.
Click here to read How to Register for RBI Retail Direct Scheme to Invest in Government Securities?
What is Sovereign Gold Bond?
According to RBI’s FAQs, SGBs are government securities, denominated in grams of gold. They are an alternative to holding physical gold. Investors will have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The bond is issued by the RBI on behalf of the government.
As per RBI notification, the issue price for Sovereign Gold Bond (SGB) Scheme 2021-22 has been fixed at Rs 4,791 per gram. For online investors, the gold bond will be offered at Rs 4,741 per gram
Minimum and maximum limit for investment in SGB
As per RBI FAQs: Bonds are issued in denominations of one gram of gold and in multiples thereof. The minimum investment in the bond will be one gram with a membership ceiling of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for similar entities per financial year as notified by the Government from time to time. April-March). In case of joint holding, the limit is applicable to the first applicant. The annual ceiling will include the bonds subscribed in various installments during the initial issue by the Government and the bonds purchased from the secondary market. The investment limit will not include holdings by banks and other financial institutions as collateral. In case of joint holding, the investment limit of 4 kg will be applicable to the first applicant only.
What is the interest rate and how will the interest be paid?
The bonds carry interest at the rate of 2.50 percent (fixed rate) per annum on the amount of the initial investment. The interest will be credited to the bank account of the investor half-yearly and the final interest will be payable on maturity along with the principal.
What are the tax implications on i) interest and ii) capital gains?
Interest on the bond will be taxable as per the provisions of the Income Tax Act, 1961 (43 of 1961). Capital gains tax arising on redemption of SGB to an individual is exempted. Indexation benefit will be provided for long-term capital gains arising to any person on transfer of the bond.
Is Tax Deduction at Source (TDS) applicable on bonds?
TDS is not applicable on bonds. However, it is the bond holder’s responsibility to comply with tax laws.
As per RBI rules, “Every application should be accompanied by the ‘PAN Number’ provided by the Income Tax Department to the investor(s).” Since the PAN number of the first / only applicant is required.
how to pay
Payment can be made in one of two ways:
a) Using the Net-Banking/UPI function of the linked bank account, where the amount will be debited at the time of bid submission on the portal.
b) Using the UPI capability, which allows cash to be blocked in the respective bank account at the time of bid submission on the portal, and then deducted from this account on successful auction allotment. Banks will be able to provide similar service in times to come.