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Thursday, 1 September 2016

BSE GOLD BONDS Tranche 5




Issue Details



 


Date of Issue
1st September 2016 to 9th September 2016
Denomination
Units of 1 gram of Gold and in multiples thereof
Forms of Bond
Physical & Demat (Certificate of holding)
Date of Allotment
23rd September 2016
Eligibility
The Bonds will be restricted for sale to resident Indian entities including Individuals, HUFs, Trusts, Universities and Charitable Institutions. NRIs Cannot invest.
Minimum Investment
Rs.3,150/- (Rs. 3,1510 * 1 Grams) (Rupees Three Thousand One Hundred and Fifty only) per gram of gold.
The rate has been fixed on the basis of simple average of closing price of gold of 999 purity for the week August 22 to 26, 2016 as published by the “India Bullion and Jewelers Association Ltd. (IBJA)”.
Maximum Investment
Rs. 15,75,000/- ( Rs. 3,150 * 500 Grams)
Issue Price
Rs 3,150/-
Interest
2.75 p.a. (Semiannual) on the amount of initial investment.
Post Maturity Interest is Not Payable.
Tenor
8 years with exit option in 5th, 6th and 7th years
Joint holder
In case of joint holding, the investment limit of 500 grams will be applied to the first applicant only.
Redemption
The Bonds shall be repayable on the expiration of 8 years from the date of issue.
Premature Redemption: From the 5th year of the date of Issue on the coupon dates

Loan Facility
The bonds may be used as a Collateral for loans
Tax Treatment
The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the capital gains tax exempt on redemption.
Nomination
The sole Holder or maximum of two persons as nominee.

Advantages of Sovereign Gold Bonds
  • Superior alternative to holding gold in physical form.
  • Risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest.
  • No issues like making charges and purity in the case of gold in jewellery form.
  • Held in the books of the RBI or in demat form eliminating risk of loss of scrip etc. 
We would like to highlight that investors who had invested in the earlier tranches have gained approximately 17.36% (Tranche 1), 21.15% (Tranche 2) & 8.02% (Tranche III) respectively. Further, any capital gains arising from redemption during the buy-back window will be exempt from tax on capital gains.

With rising gold prices, we expect much higher participation from investors in this issue.

Tranche No.
Start Date
SGB  Issue Price - IBJA (In INR)
Gold Price - IBJA (In INR)*
Absolute Amount (Gain/(Loss)
Absolute Return (%)
No. of Days (Since Start Date)
(Per Gram-999 Purity)
(Per Gram- 999 Purity)
(In INR)
2015 -16 - I
Nov’15
2,684
3,150
466
17.36%
301
2015 -16 - II
Jan’16
2,600
3,150
550
21.15%
234
2015 -16 - III
Mar’16
2,916
3,150
234
8.02%
177
2016 - 17 -I
Jul’16
3,119
3,150
31
0.99%
45
*price of current issue



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