Sovereign Gold Fund is a bond issued by RBI on behalf of Government of India. The bonds will be denominated in grams of gold and shall be sold/repurchased at the price of gold prevailing in the market at the time of sale/repurchase.

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The Bonds will be issued by Reserve Bank of India (RBI) on behalf of the Government of India.

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Yes, the application on behalf of the minor has to be made by his/her guardian.

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No. An investor can have only one unique ID. The unique investor ID is to be used for all subsequent investments in the scheme.

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Bonds will be open for subscription from time to time as announced by govt. of India. The Bonds will be available for sale through banks and designated post offices, as may be notified. 

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The Gold Bonds will be denominated in multiples of grams of gold with a basic unit of 1 gram. Minimum investment per person is 1 unit,i.e., 1 gram of gold. 

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The Sovereign Gold Bonds will offer an interest rate of 2.50%. The interest will be payable semi-annually on the initial value of investment. 

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Yes, the interest earned on Gold Bonds will be taxable as per the provisions of Sec. 43 of Income Tax Act, 1961. 

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No, TDS is not applicable. 

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The tenor of the bond will be for a period of 8 years.

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The price of the Bond will be fixed in rupee terms, on the basis of the previous week's simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd. The same procedure would be followed for calculating the redemption price for the bonds.  

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The maximum limit of subscription is 4 kg for individuals & HUF and 20 kg for trusts and similar entities notified by the Government per financial year(April - March).

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The maximum limit will be applicable to the first applicant in case of a joint holding for that specific application.

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Yes, the annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the secondary market.

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If the holding period is less than 3 years, you will need to pay Short Term Capital Gains Tax at the marginal tax rate. If the holding period is more than 3 years, you will need to pay Long Term Capital Gains tax @20% with indexation. However, if the bond is held till maturity, the Capital Gains is tax-free.

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The investors will be issued a Stock/Holding Certificate under Government of India Stock Act, 2006. The bonds are also eligible for conversion into demat form. 

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Yes, the Bonds can be used as collateral for loans and the loan-to-value (LTV) ratio will be set equal to ordinary gold loan mandated by the Reserve Bank of India from time to time. 

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Yes, the Bonds will be tradable on stock exchanges from a date to be notified by RBI. 

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Yes. Early encashment/redemption of the Bond is allowed after fifth year from the date of issue on interest payment dates. The Bonds will also be tradable on Exchanges, if held in demat form. It can also be transferred to any other eligible investor.

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The Bond can be gifted / transferred to a relative / friend / anybody who is eligible to invest in these Bonds. 

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