Gold Bond scheme gets Rs 246 cr; excellent response: FinMin

The govt received 63,000 applications for 917 kg gold amounting to Rs 246 crore in first tranche

The gold bond scheme has evoked "excellent response" with the government receiving 63,000 applications for purchase of bonds worth Rs 246 crore in the first tranche, a top official has said.

"Gold Bond Scheme: 63,000 applications for 917 kg. Gold amounting to Rs 246 crore in first tranche. Excellent response for an innovative product," Economic Affairs Secretary Shaktikanta Das tweeted.

Aimed at providing an alternative to buying physical gold, the government had sold gold bonds through banks and post offices between November 5-20. The allotment will take place on November 30.

The gold bond scheme will offer investors an interest rate of 2.75% and a choice to buy bonds worth 2 grams of gold, up to a maximum of 500 grams. The issue price of the sovereign gold bond for this tranche was Rs 2,684 per gram.

The tenor of the bond will be for a period of eight years with exit option from 5th year to be exercised on the interest payment dates.

The interest earned on gold bonds would be taxable, and capital gains tax shall be levied as in case of physical gold.

The bonds can be bought by resident Indian entities including individuals, HUFs, trusts, universities and charitable institutions.