Sovereign Gold Bonds 2022-23: Who can invest, what is the interest rate earned, how is it taxed

The first tranche of government gold bonds (SGB) for the current treasury will be available for public subscription from Monday (June 20th) and will end on Friday (June 24th). The date of issue will be June 28, 2022.

The second tranche will be available from August 22 to August 26, 2022. Here is a look at important information about the last SGB tranche, according to RBI.

Who can invest in SGB

Gold bonds issued under this scheme may be invested by a trust, HUF, charities, universities or an individual resident in India, an individual or on behalf of a minor, or jointly with others.

Details of the Soviet Gold Bond Scheme 2022-23 Series I

The nominal value of the bond is based on the simple average closing price [announced by the India Bullion and Jewellers Association Ltd (IBJA)] for gold with a purity of 999 in the last three working days of the week preceding the subscription period, ie June 15, June 16 and June 17, 2022

After consultation with the reserve

, the government of India agreed to provide a discount of 50/- to a gram less than the nominal value of those investors who apply online and pay for their application through a digital channel. The issue price of a gold bond for such investors will be Rs 5,041 / – (only five thousand forty-one rupees) per share.


SGB ​​will be denominated in grams of gold multiples, with one gram as the base unit.

What is the tenor of SBG

SGB ​​will have an eight-year expiration date, with an option to buy ahead of schedule after the fifth year on the due interest date.

Minimum size

The minimum allowable investment will be one gram of gold.

Maximum limit

Individuals can subscribe up to 4 kg, HUF up to 4 kg, and trusts and similar companies up to 20 kg for a fiscal year (April-March), as specified by the government from time to time. In this sense, a self-declaration will be obtained. SGB, recorded within different tranchers, and those purchased through the secondary market during the fiscal year will be included in the annual ceiling.

Joint holder

In the case of joint participation, the investment limit of 4 kg will only apply to the first application.

What is the issue price of SGB

The price of SGB is determined in Indian Rupees using a simple average for the last three working days of the week preceding the subscription period, as announced by India Bullion and Jewelers Association Limited (IBJA). For investors who subscribe online and pay digitally, the SGB issue price will be reduced by Rs 50 per gram.

How to make SGB payment

SGBs can be paid in cash (up to a limit of Rs 20,000), checks on demand, check or electronic banking.

SGB ​​redemption price

The redemption price will be in Indian rupees based on the simple average of the net closing prices of 999 gold provided by IBJA Ltd over the previous three business days.

Where to buy SGB

SGB ​​will be sold through commercial banks, Stock Holding Corporation of India Limited (Shcil), Clearing Corporation of India Limited (CCIL), certain post offices (as can be notified) and recognized stock exchanges, namely, National Stock Exchange of India Limited and Bombay Stock Exchange Limited, directly or through agents

SGB ​​interest rate

Investors will be paid a fixed rate of 2.50 percent annually on the nominal value, payable at six months.

SGB ​​as collateral

SGB ​​can be used as a loan collateral. The loan to value ratio (LTV) should be determined at the same level as the ordinary reserve bank gold loan.

KYC documentation

Customer Knowledge Requirements (KYC) will be the same as for physical gold purchases. Voter identity, Aadhaar / PAN or TAN / passport and other KYC documents are required. The “PAN number” provided by the Income Tax Department to individuals and other legal entities must be attached to each application.

SGB ​​tax treatment

Interest on SGBs is taxed under the provisions of the Income Tax Act of 1961 (43 of 1961). The capital gains tax resulting from the repurchase of SGB by an individual is free of charge. The long-term capital gains resulting from the transfer of SGB will be eligible for indexation benefits.


SGBs are eligible for trading.

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