The government's sovereign gold bond scheme for 2018-19 will be open for subscription from mid-October, running up to five tranches till February, the Reserve Bank said Monday.
The Sovereign Gold Bonds will be issued every month from October 2018 to February 2019 as per the calendar specified, the RBI said in a release.
The bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and BSE Limited.
The first tranche of the scheme will be open for subscription between October 15-19, while the issuance of the bonds will be on October 23.
The next tranche between November 5-19 (issue Nov 13), followed by December 24-28 (issue Jan 1); January 14-18 (Jan 22) and February 4-8 (Feb 12).
The sovereign gold bond scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings, used for the purchase of gold, into financial savings.
Under the scheme, the bonds are denominated in units of one gram of gold and multiples thereof. Minimum investment in the bonds is one gram with a maximum limit of subscription of 500 grams per person per fiscal year.
The maximum limit of subscription is 4 kg for individual and HUF and 20 kg for trusts and similar entities per fiscal (April-March).
RBI said the payment for the bonds will be through cash payment (up to a maximum of Rs 20,000) or demand draft or cheque or electronic banking.
The investors will be issued a holding certificate for the same.
The Bonds are eligible for conversion into demat form and 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.
The interest on gold bonds will be taxable as per the provision of Income Tax Act, 1961 (43 of 1961).
"The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long-term capital gains arising to any person on the transfer of bond," RBI said.
Know-your-customer (KYC) norms will be the same as that for the purchase of physical gold, RBI said further.
"KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required. Every application must be accompanied by the PAN Number' issued by the Income Tax Department to the investor.