Sovereign Gold Bond Scheme: Buying gold during Dhanteras and Diwali is considered very auspicious. In the changing environment, people are now shifting to Gold Bond or Gold ETF instead of Physical Gold. Actually, the Sovereign Gold Bond Scheme is better than physical gold in all respects in terms of investment. If you are also planning to buy gold for the purpose of investment, then it should be known why gold bonds are a better option than physical gold. The best thing is that just before Dhanteras, the eighth series of sovereign gold bond scheme is opening for subscription from Monday, November 9.
900 rupees cheaper gold from the market
The eighth series of the Sovereign Gold Bond Scheme is opening for subscription on 9 November. Gold bonds can be invested till November 13. For Sovereign Gold Bonds, the government has fixed the price at Rs 5,177 per gram i.e. Rs 51770 per 10 gram. On the other hand, if you buy online, you will get a discount of Rs 50 on every 1 gram and Rs 500 on 10 grams. The online price of 10 grams of gold will be Rs 51270. At the same time, the price of gold on MCX is Rs 52168 per 10 grams. In this context, the price of the gold bond is about Rs 898 per 10 grams.
2.5 percent annual interest
The biggest advantage of buying gold bonds is that it keeps adding interest rate at 2.5% per annum. Apart from this, the rise in the price of gold will also benefit. However, there is no additional interest on keeping physical gold. At the same time, 100 percent price is not available even after selling.
Tax free on maturity
Gold bond maturity is tax-free. It is also a better option for HNIs, where it does not have to pay capital gains tax to hold till maturity. Equity attracts 10% of capital gains tax. The expense ratio is nothing in this.
No risk of default
Gold bond is supported by the Indian government, so there is no risk of default. It is easier and safer to manage than physical gold. There is no hassle of purity in this and prices are decided on the basis of pure gold. It has easy exit options. At the same time, the facility of loan against gold bonds is available. Talking about the last 10 years or 15 years, gold has consistently given good returns. Hence it is a good option for long term.
How much can you buy gold?
The Reserve Bank of India issues sovereign gold bonds on behalf of the Government of India. Indian citizens, Hindu undivided families, trusts, universities and charitable institutions living in the country can buy this bond. Under this scheme, you can buy at least 1 gram of gold. Under this scheme, a person can buy gold bonds up to a maximum of 4 kg in a financial year. At the same time, the limit for trust is 20 kg.
How and where to buy?
You can buy gold bonds online. Apart from this, it will also be sold through banks, Stock Holding Corporation of India Limited (SHCIL), select post offices and stock exchanges like NSE and BSE. You can save tax by investing in this scheme. Explain that the government started the Sovereign Gold Bond Scheme in November 2015 with the goal of reducing the demand for physical gold.
What is Sovereign Gold Bond
In Sovereign Gold Bonds, the investor receives a gold in paper form, not in physical form. It is safer than physical gold. As far as purity is concerned, its accuracy cannot be doubted due to its electronic form. After 3 years, this will attract long term capital gains tax (keeping till maturity will not attract capital gains tax). At the same time, you can use it for loans. If you talk about redemptions, you can redeem it anytime after 5 years.