Info one can use
Gold Bond Open - 5th Nov15
Close - 20th Nov15
Issue Price - Rs.2,684 per gram
Issuance Date - 26th Nov15.
Min Inv - 2gms
Max Inv - 500gms
Interest - 2.75%
Tenure - 8yrs
Exit Option - 5th yrs date of issue.
GOLD BOND-Know Key Facts
The government wants to develop sovereign gold bonds as an
alternative to purchasing the yellow metal.
Sovereign gold bonds will be
issued on payment of money and would
be linked to the price of gold and main idea is to reduce the demand for physical
gold. The bonds will be issued on behalf of government by RBI.
The borrowing through issuance of the bond will form part of
market borrowing programme of government. So, here are 12 things that you need
to know:
#1 The bonds will be
issued on November 26, 2015. Applications for the bond will be accepted from
November 05, 2015 to November 20, 2015.
#2 Interest rate is fixed rate at 2.75 %pa payable
semi-annually on the initial value of investment. Interest on gold bonds shall
be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the
capital gains tax shall also remain same as in the case of physical gold.
#3 The bonds will be restricted for sale to resident Indian
entities including individuals, HUFs, trusts, Universities, charitable
institutions.
#4 Bonds will be sold through banks and designated post
offices, as may be notified, either directly or through agents.
#5 Bonds will be denominated in multiples of grams of gold
with a basic unit of 1 gram. Minimum permissible investment will be 2 grams of
gold. Maximum amount subscribed by an entity will not be more than 500 grams
per person per fiscal year (April-March). A self-declaration to this effect
will be obtained. In case of joint holding, the investment limit of 500 grams
will be applied to the first applicant only. The bonds will be issued in
tranches. Each tranche will be kept open for a period to be notified.
#6 Price of bond will be fixed in Indian currency on the
basis of the previous week’s (Monday–Friday) simple average of closing price of
gold of 999 purity published by the India Bullion and Jewellers Association
Ltd. (IBJA). Payment for the bonds will be through electronic funds
transfer/cash payment/ cheque/ demand draft.
#7 The tenor of the bond will be for a period of 8 years
with exit option from 5th year to be exercised on the interest payment dates.
#8 The bonds are eligible for conversion into de-mat form.
#9 Bonds can be used as collateral for loans. The
loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by
the Reserve Bank from time to time.
#10 Bonds will be tradable on exchanges/NDS-OM from a date
to be notified by RBI.
#11 The Bonds will be eligible for Statutory Liquidity
Ratio.
#12 Know-your-customer (KYC) norms will be the same as that
for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN
or TAN /Passport will be required.
