The Sovereign Gold Bond (SGB) 2022-23 – Series IV Program, issued by the RBI on behalf of the Central Government, is now available for purchase. The subscription period that started on March 06, 2023 ends on March 10, 2023.
The price of SGB has been fixed at ₹5,611 per gram or unit of gold. The government is offering a rebate of ₹50 per gram to those who apply online and pay digitally, and the issue price of SGB is set at ₹5,561 per gram for such investors.
Every SGB is equivalent to 99.9 per cent pure gold. Investing in an SGB frees investors from pertinent issues including gold purity, making charges, etc. These bonds are considered physical alternatives to gold as they do not contain impurities. Since these bonds are issued by the RBI, the risk of default is “Nil”.
By default, the lock-in period in these bonds is eight years. Meanwhile, the government allows investors to prematurely redeem their investments after five years. The capital gains tax is not applicable on the maturity amount post eight years. However, capital gains tax is applicable on the premature redemption amount. Apart, SGBs are free of tax as there is no security transaction tax imposed on trades in SGBs.