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Looking to buy sovereign gold bond? Here’s how you can get discount

FE Online
Spot gold rose 0.1% to ,505.95 per ounce as of 0027 GMT. U.S. gold futures gained 0.5% to ,511.40.

The latest tranche of sovereign gold bond (SGB) scheme 2019-20 is open for subscription and investors can avail discount on the purchase. The Reserve Bank of India (RBI) fixed an issue price of Rs 3,788 per gram for the SGB scheme 2019-20-Series V. The RBI is offering a discount of Rs 50 per gram on digital purchase of these bonds. The subscription of the tranche opened on Monday and it will end on Friday. The settlement date for the same is October 15, 2019. These bonds are government securities denominated in grams of gold with a basic unit of 1 gram and they are issued by the central bank. These were first launched in 2015. An investor can purchase a minimum of 1 gram of gold and can subscribe for maximum 4kg for individual and HUFs. The highest purchase limit is set at 20 kg for trusts and entities.

The bonds have a maturity period of 8 years. The redemption price is linked to the prevailing price of gold. The bond is issued by the RBI on behalf of the government. The capital gains tax arising from redemption of sovereign gold bonds has been exempted. In addition, the indexation benefit is provided to LTCG arising to any person on transfer of bonds. These bonds can also be used as collateral for loans.

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Meanwhile, the gold prices on Wednesday rose by Rs 315 to Rs 39,325 per 10 grams at the bullion market in the national capital following strong global cues. The yellow metal had closed at Rs 39,010 per ten grams on Monday. Silver was trading up by Rs 1,010 to Rs 47,330 per kg as against the Monday’s closing price of Rs 46,320 per kg. The bullion market was closed on Tuesday on account of Dussehra.