New Delhi: Although the price of gold has been constantly increasing for the past several days, the central government is providing opportunities to citizens to buy gold at cheaper rates. The investors can now buy gold at a lower rate than the market rate under the Sovereign Gold Bond scheme. The scheme is only available for five days starting today. The scheme also provides other benefits such as exemption of income tax on the profit on its sale.
The investment period under the scheme started on 12 October 2020 i.e. from today and 16 October 2020 is its last day. This is the seventh series of the financial year 2020-21 for the government to invest in gold bonds. The first series began on 20 April 2020 and ended on 24 April 2020.
Under the scheme you can buy gold at Rs 5,051 per gram. That is, if you buy 10 grams of gold, then it costs Rs 50,510. The government will provide an additional rebate of Rs 50 per gram, if the investors purchase gold bonds online. In other words, investors buying gold online will have to pay Rs 5,001 per gram, costing10 grams of gold for Rs 50,010.
The Reserve Bank issues these bonds on behalf of the Government of India. Apart from banks, post offices, NSE and BSE, you can buy gold bonds also through Stock Holding Corporation of India Limited.
Gold bonds have a maturity period of eight years and get an interest of 2.5% per annum. The interest accrued on the bond is taxable as per the tax slab of the investor, but tax is not deducted at source.
The bond’s face value is based on the simple average closing price (published by the India Bullion and Jewelers Association) over the past three working days for 999 purity gold. The minimum allowable investment is one gram of gold and a maximum of four kg per person. For a Hindu undivided family, the maximum limit of investors is four kg and 20 kg for trusts and similar organizations. The government had raised the import duty on gold from 10 % to 12.5 % in the budget. The gold prices are continuously rising due to increased buying globally.