Gold Bond Scheme 2018-19 (Series II) – Issue Price

Sovereign Gold Bond Scheme 2018-19 (Series II) – Issue Price 
      Government of India, in consultation with the Reserve Bank of India, Sovereign Gold Bonds 2018-19 (Series II) will be opened for the period October 15-19, 2018. The issue price of the Bond during this subscription period i.e. October 15-19, 2018, shall be `3,146 (Rupees Three Thousand One Hundred Forty Six only) – per gram with Settlement on October 23, 2018, as also published by RBI in their Press Release dated October 12, 2018. 
     Government of India in consultation with the Reserve Bank of India, has decided to allow discount of `50 (Rupees Fifty) per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors the issue price of Gold Bond will be `3,096 (Rupees Three Thousand Ninety Six only) per gram of gold.
Gold+Bond+Scheme
Sovereign Gold Bond Scheme 2018 -19
Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds-2018-19. The Sovereign Gold Bonds will be issued every month from October 2018 to February 2019 as per the calendar specified below:
S. No. Tranche Periodof Subscription Date of Issuance
1 2018-19 Series II October 15-19, 2018 October 23, 2018
2 2018-19 Series III November 05-09, 2018 November 13, 2018
3 2018-19 Series IV December 24-28, 2018 January 01, 2019
4 2018-19 Series V January 14–18, 2019 January 22, 2019
5 2018-19 Series VI February 04-08, 2019 February 12, 2019

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 Bombay Stock
Exchange Limited. The features of the Bond are given below:

Sl. No. Item Details
1 Product name Sovereign Gold Bond 2018-19.
2 Issuance To be issued by Reserve Bank India on behalf of the
Government of India.
3 Eligibility The Bonds will be restricted for sale to resident entities
including individuals, HUFs, Trusts, Universities and
Charitable Institutions.
4 Denomination The Bonds will be denominated in multiples of gram(s) of
gold with a basic unit of 1 gram.
5 Tenor The tenor of the Bond will be for a period of 8 years with
exit option in 5th, 6th year and 7 th year to be exercised on the interest payment
dates.
6 Minimum size Minimum permissible investment will be 1 gram of gold.
7 Maximum limit The maximum limit of subscribed shall be 4 KG for
individual, 4 Kg for HUF and 20 Kg for trusts and similar
entities per fiscal (April-March) notified by the
Government from time to time. A self-declaration to this
effect will be obtained. The annual ceiling will include
bondssubscribed under different tranches during initial
issuance by Government and those purchased from the
Secondary Market.
8 Joint holder In case of joint holding, the investment limit of 4 KG will
be applied to the first applicant only.
9 Issue price Price of Bond will be fixed in Indian Rupees on the basis
of simple average of closing price of gold of 999 purity,
published by the India Bullion and Jewellers Association
Limited for the last 3 working days of the week preceding
the subscription period. The issue price of the Gold Bonds
will be `50 per gram less for those who subscribe online
and pay through digital mode.
10 Payment option Payment for the Bonds will be through cash payment (up to a
maximum of `20,000) or demand draft or cheque or electronic
banking.
11 Issuance form The Gold Bonds will be issued as Government of India Stock
under GS Act, 2006. The investors will be issued a Holding
Certificate for the same. The Bonds are eligible for
conversion into demat form.
12 Redemption price The redemption price will be in Indian Rupees based on
previous 3 working dayssimple average of closing price of
gold of 999 purity published by IBJA.
13 Sales channel Bonds will be sold through banks, Stock Holding Corporation
of India Limited (SHCIL), designated post offices (as may
be notified) and recognised stock exchanges viz.,
National Stock Exchange of India Limited and Bombay Stock
Exchange, either directly or through agents.
14 Interest rate The investors will be compensated at a fixed rate of 2.50
percent per annum payable semi-annually on the nominal
value.
15 Collateral 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.
The lien on the bonds shall be marked by the depositary by
the authorized banks. The loan against SGBs would be
subject to decision of the lending bank/institution and
cannot be inferred as a matter of right by the SGB holder.
16 KYC documentation 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. Every
application must be accompanied by the ‘PAN Number’ issued
by the Income Tax Department to the investor(s).
17 Tax treatment The interest on Gold Bonds shall 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 transfer
of bond.
18 Tradability Bonds will be tradable on stock exchanges within a
fortnight of the issuance on a date, as notified by the
RBI.
19 SLR eligibility Bonds acquired by the banks through the process of invoking
lien/hypothecation/pledge alone, shall be counted towards
Statutory Liquidity Ratio.
20 Commission Commission for distribution of the bond shall be paid at
the rate Rupee one per hundred Rupees the total
subscription received by the receiving offices and
receiving offices shall share at least paise 50 per hundred
Rupees of the commission so received with the agents or sub
agents for the business procured through them.
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