Gold Bonds
The best option to invest in gold is to buy Sovereign Gold Bonds (SGB) issued by Govt. of India, through RBI. The SGB issue will be available to the public on 4-5 occasions in each Financial Year. These are the terms of the SGB issues:
1) Purity of gold: 24 carat (999 purity).
2) Tenure: 8 years.
3) Early redemption: After 5 years.
4) Price per gm of 24 ct gold: Average price of latest 3 days prior to issue date of SGB.
5) Price payable on maturity: Average price of latest 3 days prior to date of maturity.
6) Mode of holding: In physical certificate form or demat form.
7) Tax-exemption on Gain: The entire gain is tax-free to individuals if the SGBs are held till maturity (8 years). If redeemed after 5 years during the exit window period, the gain is taxable @20% after adjusting for inflation.
8) Additional benefit: Interest is payable @2.5% p.a. (in half-yearly intervals). The total interest payable in the 8 years period is 20% on the invested amt. Tax exemption is not applicable to interest.
9) Minimum & Maximum Investment: Minimum of 1 gram and maximum of 4 kgs are permitted in a financial year. The maximum investment for Trust and other entities is 20 kgs per financial year.
10) Listing: SGBs of all series will be listed in NSE & BSE. Hence, those who hold SGBs in demat form can sell them through NSE/BSE before maturity, in case of need.
