Govt unveils 3rd tranche of gold bonds

NEW DELHI: The government on Friday announced the third tranche of the Sovereign Gold Bonds and the scheme will be open from March 8 to March 14. The bonds will be issued on March 29.
Economic affairs secretary Shaktikanta Das held a review meeting with CMDs of banks on Thursday and discussed their preparedness for the latest scheme. To raise awareness among depositors, the government will continue a media campaign on AIR and FM radio, print media and through text messages.
The Sovereign Gold Bond Scheme was launched in November with an objective to reduce the demand for physical gold and shift a part of the yellow metal imported every year for investment purposes, into financial savings through gold bonds.
The bonds are issued by RBI on behalf of the government on payment of the required amount in rupees and are denominated in grams of gold. They are restricted for sale to resident Indian entities including individuals, HUFs (Hindu Undivided Families), trusts, universities, charitable institutions. The minimum permissible investment is 2 grams of gold to be paid in rupees. The maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year (April-March).
The government has fixed the rate of interest for 2015-16 as 2.75% per year, payable on a half yearly basis. The bonds are available in both in demat and paper form.
The rate for the bonds is fixed on the basis of simple average of closing price for gold of 999 purity of the previous week published by the India Bullion and Jewellers Association (IBJA).
The bonds will be available at banks, post offices and Stock Holding Corporation of India and the tenor is for a period of 8 years with exit option from 5th year onwards to be exercised on the interest payment dates. The Know Your Customer norms are same as that for gold. Exemption from capital gains tax would be available.
Long term capital gains arising to any person on transfer of these bonds is also eligible for indexation benefits. On maturity, the investor will get the equivalent rupee value of the quantum of gold invested at the then prevailing price of gold.