Amid the volatile economic situation across the country due to COVID-19, the Reserve Bank of India (RBI) has opened the subscription for the sixth tranche of gold bonds this fiscal.
The central bank has fixed the issue price of the gold bond at Rs 5,117 per gram. However, those applying online for the subscription will get a discount of Rs 50 per gram and they will have to pay Rs 5,067, instead of 5,117.
The RBI, which issues sovereign gold bonds on behalf of the central government, has fixed the minimum permissible investment at 1 gram. The subscription of the sixth tranche will close on September 4. The central bank has set September 8 as the issuance date for the gold bonds. Those investing will be provided with a holding certificate for the same.
Those subscribing will get an interest rate of 2.5 per cent and the bond has a maturity period of eight years. People can withdraw their amount after the fifth year.
If the buyer has made capital gain at the time of maturity, then it will be tax-free. This exclusive benefit is available on the gold bonds.
At the time of exit, the amount will be paid based on the then market price of gold. That price will be the average of the closing price of gold of the previous three business days from the date of repayment. The rate is released by the India Bullion and Jewelers Association Limited.
The bond can also be traded on exchanges if it is held in the demat form. In this case, an exit route is available before five years, subject to liquidity.
The buyer of the gold bonds is also eligible for a loan, using it as collateral.
Gold currently trades at Rs 51,400 levels per 10 gram in the future markets, much lower compared to the August 7 price of Rs 56,200.
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