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    Sovereign Gold Bond series VI opens today; should you invest?

    Sovereign Gold Bond series VI opens today; should you invest?

    Sovereign Gold Bond series VI opens today; should you invest?
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    By Anshul   IST (Published)

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    The sixth tranche of the Sovereign Gold Bond scheme for 2021-22 has opened for subscription today. The issue price for the same has been fixed at Rs 4,732 per gram of the yellow metal. Online subscribers can, however, secure these bonds at a discount of Rs 50 per gram.

    The sixth tranche (VIth) of the Sovereign Gold Bond (SGB) scheme for 2021-22 has opened for subscription today. The issue price for the same has been fixed at Rs 4,732 per gram of the yellow metal. Online subscribers can, however, secure these bonds at a discount of Rs 50 per gram.
    This subscription of bonds will close on September 3, 2021, and the certificate of bonds will be issued on September 7, as per the Reserve Bank of India (RBI).
    According to Nish Bhatt, founder and CEO, Millwood Kane International, investment in SGB is fast picking pace.
    “RBI raised Rs 16,049 crore in FY21 via the twelve tranches of SGBs, a total of over Rs 25,702 crore since its inception in November 2015 as per its annual report,” he said.
    As per Bhatt, investment in SGB provides high liquidity and is easier to sell vs physical gold. It also comes with an interest coupon payable semi-annually.
    Additionally, with SGBs, investors are not required to worry about the storage of gold as it is in a demat form. Also, there are no local taxes that a buyer needs to pay while buying.
    On gold prices, Bhatt said that it has been trading sideways for the past few days. However, it has recovered much of its losses witnessed in the month of August.
    “Gold prices have gained significantly in the past five months since the second wave forced lockdowns in April. Moving forward, gold prices will be guided by the impact of the delta variant of COVID-19, the geopolitical situation in Afghanistan, and most importantly how the Fed signals tapering and manage the rising inflation in the US,” he added.
    How can one invest in SGB?
    Those looking to subscribe to the SGBs in this tranche can apply through banks, Stock Holding Corporation of India Limited (SHCIL), stock exchanges NSE and BSE, designated post offices or through agents.
    When does an SGB mature?
    The tenure of the bond is for a period of eight years with an exit option after the fifth year to be exercised on the interest payment dates.
    How are SGBs taxed?
    The interest on gold bonds is taxable as per the provision of the Income Tax Act. The capital gains tax arising on redemption of SGB to an individual is, however, exempted. The indexation benefits are provided to long-term capital gains arising to any person on the transfer of bond.
    Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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