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All That Glitters is Gold: Sovereign Gold Bond Series 2023-2024 Series I

Should You Invest In The New Sovereign Gold Bond Series?

A remarkable investment opportunity has emerged with the launch of the first tranche of the Sovereign Gold Bond Scheme (SGB) 2023-24 - Series I. This scheme, fully backed by the central government, is set to open for subscription on June 19, marking a significant milestone for investors. In an official statement released by the Finance Ministry on Friday, it was revealed that the issue price for this series has been fixed at Rs 5,926 per gram of gold. Prospective investors can subscribe to this exclusive offering from June 19 to June 23, with the settlement date set for June 27.

WHAT IS Sovereign Gold Bond Scheme (SGB):

Sovereign Gold Bond are Govt. Securities denominated in grams of gold, Issued by the Reserve Bank of India (RBI) and were launched Substitute for physical gold launched by the government in November 2015, SGBs aim to reduce the demand for physical gold and encourage a portion of domestic savings to be channeled into financial savings. The SGB also offers an annualized 2.5% fixed interest which is paid out biannually. Investors can start with a minimum investment of 1 gram of gold. These bonds come with a lock-in period of 8 years, offering investors the flexibility to exercise exit options in the 5th, 6th, and 7th years, coinciding with the interest payment dates. The SGB is listed and tradable on Stock Exchanges

What is the Pricing of the Sovereign Gold Bond Scheme (SGB):

The SGB pricing is determined by the Nominal Value of the Gold Bond which is the Simple average of the INR closing price of gold of 999 purity for the last 3 working days of the week preceding the subscription period, as published by the Indian Bullion & Jewellery Association (IBJA). The Issue Price: Nominal Value less Rs.50 per gram for online applications with payment via digital mode. For the SGB 2023-24 - Series the listed fixed issue price of Rs 5,926 per gram of gold. In line with the goal of digital India, the government provides an incentive for payment made through digital and online modes, and a discount of Rs 50 per gram of gold is given. This initiative, jointly implemented by the RBI and the central government, enables eligible investors to purchase the current tranche of the SGB at a reduced price of Rs 5,876 per gram of gold

What is the Taxation Policy For Individuals buying Sovereign Gold Bond Scheme (SGB):

Regarding tax treatment, interest earned on SGBs is taxable under the Income Tax Act of 1961 (43 of 1961). However, individuals are exempt from capital gains tax upon redemption of SGBs. Long-term capital gains resulting from the transfer of SGBs are eligible for indexation benefits, further enhancing the potential returns for investors.


The SGB offers clear advantages against physical Gold as well as beating Gold ETF's in most aspects

Benefits Of Sovereign Gold Bond Scheme SGB:

  1. Secure

  2. Can Be used for loan collateral

  3. Yearly Interest payment of 2.5%

  4. Exempt from any GST charges

  5. There are no capital gains on redemption

  6. No annual expenses unlike ETF

  7. Though the holding period is 8 years one can still trade it on the exchange

Historical Issue Price Of Sovereign Gold Bond Scheme SGB:

Sovereign Gold Bond
Historical Issue Price Of Sovereign Gold Bond Scheme SGB:

The first tranche of the Sovereign Gold Bond Scheme (SGB) was issued on November 2015 at a listing price of Rs 2684. The last tranche of 2022-23 was issued in March 2023 at a listing price of Rs 5611

Gold acts as a great hedge against inflation and also tends to appreciate whenever there is a recession, dollar correction, and change in the interest rate cycle (an increase in the interest rate cycle should be at an end) and this could mean Gold is poised for a multi-year bull run. Allocation of 10% of your portfolio to Gold investment is a good idea and Sovereign Gold Bonds Offers the most cost-effective, safe, and tax-efficient method for gold investments.


Can I buy/sell Sovereign Gold Bond on the Secondary Market?

Yes, SGBs are listed and traded on the Secondary Market under the Debt Market segment.

What are the interest payment dates for SGB?

Interest payment dates are decided based on date of issuance. ● E.g. if date of issuance is January 5th, 2021, then IP dates will be January 5th & July 5th.

Is the interest paid on SGB taxable or tax-free?

Interest paid is taxable and will be added to the investor’s taxable income. There is no TDS on interest paid

What is the tax treatment for Sovereign Gold Bond purchased on the Secondary Market?

SGB held for more than 3 years will be taxed @ 20% with indexation benefit. ● SGBs held for less than 3 years will be taxed as short-term capital gains & added to investor’s income.

Will I get gold on the maturity of the bonds?

Sovereign Gold Bond will be redeemed in Indian Rupees & Redemption price shall be a simple average of the closing price of 999 purity gold of the previous 3 working days, published by the Indian Bullion & Jewelers Association.

Can I do a SIP in SGB?

There is no SIP option in SGB. ● RBI has been issuing SGBs on a monthly basis which can be purchased from E-Wealth A/c.

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