Sovereign Gold Bond: Premature withdrawal of Sovereign Gold Bond issued on October 30, 2017 has been allowed. Based on simple average of closing gold prices on 25-27, SGB price will be Rs 6,079.
The Reserve Bank of India (RBI) has fixed the price for premature withdrawal in the Government Gold Bond (SGB) scheme at Rs 6,079 per unit. This price will be for October 2017 series. Withdrawals will start from October 30th. According to RBI, premature withdrawal of Sovereign Gold Bonds issued on October 30, 2017 has been allowed. The maturity period under the SGB scheme is eight years, but there is an option to withdraw the amount after completion of five years. The window for redemption before maturity opens every six months. This discount is applicable according to the date on which the interest is payable.
This is how the price is decided
The central bank said the redemption price of the bonds will be based on a simple average of the closing price of gold of 999 purity. According to the India Bullion and Jewelers Association Limited (IBJA) report, this price is decided on the basis of simple average of closing prices of gold in the trading sessions three days before the withdrawal date. According to this, the withdrawal date is October 30. In such a situation, based on the simple average of closing gold prices on October 25-27, the price of SGB will be Rs 6,079 per unit.
Tax rules for premature withdrawal
Interest on government gold bonds is 2.5 percent per annum. It is payable half-yearly. Although the interest earned on gold bonds is taxable, there is no tax on capital gains arising from redemption of these bonds. If the investor wants to redeem the bond after eight years or earlier, he will not have to pay capital gains tax.
What is Sovereign Gold Bond: This is an investment bond (bond) issued by the government. It was started in 2015. This is an alternative to investing in gold. It is issued by the Reserve Bank on behalf of the government. It is purchased in units like a mutual fund. On selling it, one gets the amount not in gold but based on its current value at that time. You can invest a minimum amount equal to one gram of gold in this.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at informalnewz@gmail.com
