Sovereign Gold Bond scheme opens today: 7 things you need know before investing

By Team Newsable | First Published Mar 6, 2023, 3:30 PM IST

The issue price is decided based on the average closing price for the last three working days of the week preceding the subscription period. These rates are published by the India Bullion and Jewellers Association Limited.

If you are planning to diversify your portfolio, the last tranche of the Sovereign Gold Bond (SGB) Scheme 2022-23 of this financial year can be a good option, which is available for subscription from today (March 6).

The issue price of SGB Series IV 2022-23 is fixed at Rs 5,611 per gram of gold, which is Rs 202 higher compared with the issue price of Rs 5,409 per gram in December 2022. It is reportedly said that the subscription will be open till March 10.

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According to experts, considering inflation, impending global volatility and underperforming equity markets it is a good time to diversify one's portfolio by investing 10-15 percent of investments in the yellow metal.

Here are 7 facts you should know about Sovereign Gold Bond (SGB) Scheme:

1. The SGBs are securities denominated in grams of gold issued by the Reserve Bank of India (RBI) on behalf of the Centre.

2. Though there is a sovereign guarantee, there is no physical backing of gold in SGBs.

3. This is one of the cheapest ways of buying gold as there is no GST and other charges added to the issue price.

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4. The issue price is decided based on the average closing price for the last three working days of the week preceding the subscription period. These rates are published by the India Bullion and Jewellers Association Limited.

5. If you buy online then prices get reduced by Rs 50 per gram for those who make the payment through digital mode.

6. One can invest a maximum of 4 kgs annually in these bonds. The minimum limit is 1 gram of gold

7. Most importantly, no tax is levied on the redemption of SGB after the completion of the maturity period. If you, however, sell it before 36 months, then it will be taxable as Short-Term Capital Gains and taxed as per your income tax slab.

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