Issue price of Sovereign Gold Bond fixed at Rs 3,119/gm

Issue price for the fourth tranche of Sovereign Gold Bond, opening July 18, has been fixed at Rs 3,119 per gram.
Announcing the price, Reserve Bank said the Series I of the Sovereign Gold Bond 2016-17 will be open for subscription from July 18 to 22.
The rate, it said, has been fixed on the basis of simple average of closing price of gold of 999 purity for the week July 11 to 15, 2016, as published by the India Bullion and Jewellers Association Ltd (IBJA).
The bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges namely NSE and BSE, it said.

The government had launched the first tranche of sovereign gold bond scheme in November for which it got subscription for 915.95 kg of gold worth Rs 246 crore.
The funds raised through the bonds will form part of the government's market borrowing programme.

Budget 2016-17 has proposed that redemption of the bonds by an individual be exempt from capital gains tax.
Under the scheme, gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment. The scheme has an annual cap of 500 grams per person.

Prime Minister Narendra Modi on November 5, 2015 had launched the scheme to wean investors away from physical gold.
India imports about 1,000 tonnes of gold every year and the precious metal is the second-biggest constituent of the import bill after crude oil.