The Government of India, in interview with the Reserve Bank of India (RBI), has chosen to issue fifth Tranche of Sovereign Gold Bonds. Applications for the bonds will be acknowledged from September 01, 2016 to September 09, 2016. The Bonds will be issued on September 23, 2016. The Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), assigned post workplaces and perceived stock trades viz., National Stock Exchange of India Limited and Bombay Stock Exchange.
It might be reviewed that the Union Finance Minister Shri Arun Jaitley had reported in his Budget Speech while displaying the Union Budget 2015-16 in Parliament about building up a monetary resource, Sovereign Gold Bond, as a contrasting option to buying the metal gold.
In like manner, four tranches of issuances have been embraced amid 2015-16 and 2016-17 (in this way). The elements of the Sovereign Gold Bond are given underneath:
Sl. No. Thing Details1 Product name
Sovereign Gold Bond 2016-17 – Series II
To be issued by Reserve Bank India for the benefit of the Government of India.
The Bonds will be confined available to be purchased to inhabitant Indian substances including people, HUFs, Trusts, Universities and Charitable Institutions.
The Bonds will be named in products of gram(s) of gold with an essential unit of 1 gram.
The tenor of the Bond will be for a time of 8 years with way out choice from fifth year to be practiced on the interest installment dates.
6 Minimum size
Least reasonable venture will be 1 gram of gold.
7 Maximum farthest point
The greatest sum subscribed by a substance won't be more than 500 grams for every individual per financial year (April-March). A self-affirmation to this impact will be acquired.
8 Joint holder
In the event of joint holding, the venture furthest reaches of 500 grams will be connected to the primary candidate as it were.
9 Issue cost
Cost of Bond will be altered in Indian Rupees on the premise of straightforward normal of shutting cost of gold of 999 immaculateness distributed by the India Bullion and Jewelers Association Limited for the week (Monday to Friday) going before the membership time frame.
10 Payment alternative
Installment for the Bonds will be through money installment (upto a most extreme of Rs. 20,000) or request draft or check or electronic keeping money.
11 Issuance structure
Administration of India Stock under GS Act, 2006. The speculators will be issued a Holding Certificate. The Bonds are qualified for change into demat structure.
12 Redemption cost
The recovery cost will be in Indian Rupees in view of earlier week's (Monday-Friday) basic normal of shutting cost of gold of 999 immaculateness distributed by IBJA.
13 Sales channel
Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), assigned post workplaces (as might be informed) and perceived stock trades viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either specifically or through operators.
14 Interest rate
The financial specialists will be remunerated at an altered rate of 2.75 for every penny for every annum payable semi-yearly on the underlying estimation of speculation.
Bonds can be utilized as guarantee for advances. The advance to-quality (LTV) proportion is to be set equivalent to common gold credit ordered by the Reserve Bank every now and then.
16 KYC Documentation
Know-your-client (KYC) standards will be the same as that for buy of physical gold. KYC archives, for example, Voter ID, Aadhaar card/PAN or TAN/Passport will be required.
17 Tax treatment
The enthusiasm on Gold Bonds might be assessable according to the arrangement of Income Tax Act, 1961 (43 of 1961). The capital additions charge emerging on recovery of SGB to an individual has been exempted. The indexation advantages will be given to long haul capital increases emerging to any individual on exchange of bond
Bonds will be tradable on stock trades/NDS-OM from a date to be told by the RBI inside 15 days of the issue date i.e. September 23, 2016.
19 SLR qualification
The Bonds will be qualified for Statutory Liquidity Ratio purposes.
Commission for dispersion of the security might be paid at the rate of 1% of the aggregate membership got by the getting workplaces and accepting workplaces should share no less than half of the commission so got with the operators or sub specialists for the business acquired through them.