Sovereign Gold Bond is being
promoted by RBI, where in the person will be having an option to purchase the
gold bond at the market rates. These bonds may be converted in to demat form as
well.
The application of these bonds
will be accepted from 5th November, 2015 till 20th
November, 2015 through banks and designated post offices. The dates may further be opened in tranches by RBI through Public Notification.
Details of the Bonds are as
follows:
1. Eligibility
for Investment:
The Bonds under
this Scheme may be held by a person resident in India, being an individual, in
his capacity as such individual, or on behalf of minor child, or jointly with
any other individual. Resident Indian entities include individuals, HUFs,
trusts, Universities, Charitable institutions. Thus the bonds may be purchased
in the name of the Resident Indian Entity. The holder of the bond shall be
provided with certificate as per Form C
(click to see the format).
2. Applications
Subscription for
the Bonds may be made in the prescribed application form (Form ‘A’)
or in any other form as near as thereto stating clearly the grams of gold and
the full name and address of the applicant. The receiving office shall issue an
acknowledgment receipt in Form ‘B’
to the applicant.
3. Denomination:
The minimum size
of gold bond that a person can buy is 2 gm of gold, further the bond is
available in the multiples of 1 gm of gold with maximum limit of 500 gm of
gold.
4. Issue
Price
Price of the
Bonds shall be fixed in Indian Rupees on the basis of the previous week’s
(Monday – Friday) simple average closing price for gold of 999 purity,
published by the India Bullion and Jewellers Association Ltd. (IBJA).
5. Payment
Options
Payment shall be
accepted in Indian Rupees through Cash or Demand Drafts or Cheque or Electronic
banking. Cheque or draft should be drawn in favour of the bank / post office
(Receiving Office), specified in paragraph 7 above and payable at the place
where the applications are tendered.
6. Redemption
/ Maturity / Exit Option
The Bonds shall be
repayable on the expiration of eight years from the date of issue. Pre-mature
redemption of the Bond is allowed from fifth year of the date of issue on the
interest payment dates. The redemption price shall be fixed in Indian Rupees on
the basis of the previous week’s (Monday – Friday) simple average closing price
for gold of 999 purity, published by IBJA.
7. Loan against Bonds
The Bonds may be used as collateral
for loans. The Loan to Value ratio will be as applicable to ordinary gold loan
mandated by the RBI from time to time. The lien on the Bonds shall be marked in
the depository by the authorized banks.
8. Interest Rate
The investor will be compensated at a
fixed rate of 2.75 percent per annum payable semi-annually on the initial
investment.
9. Tax Treatment (Income Tax on interest of Gold Bonds)
Interest on the Bonds shall be
taxable as per the provisions of the Income-tax Act, 1961. Capital gains tax
treatment will be the same as that for physical gold.
10. Tradability in Bonds
The Bonds shall be eligible for
trading from such date as may be notified by the Reserve Bank of India.
11.
Transferability
The Bonds shall be transferable by
execution of an Instrument of transfer as in Form ‘F’, in
accordance with the provisions of the Government Securities Act, 2006 (38 of
2006) and the Government Securities Regulations, 2007, published in part III,
Section 4 of the Gazette of India dated the 1st December, 2007.
12.
SLR Eligibility
The bonds will be eligible for
Statutory Liquidity Ratio
13.
Nomination
Nomination and its cancellation shall
be made in Form ‘D’ and Form ‘E’,
respectively, in accordance with the provisions of the Government Securities
Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007,
published in part III, Section 4 of the Gazette of India dated the 1st
December, 2007.
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