The Reserve Bank of India (RBI) has set the rate for early redemption of Sovereign Gold Bond 2016-17 Series-I at Rs 5,717. The advantage of early withdrawal can be used from February 4, 2023.
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The Reserve Bank of India (RBI) has set the rate for early redemption of Sovereign Gold Bond 2016-17 Series-I at Rs 5,717. The advantage of early withdrawal can be used from February 4, 2023. The Sovereign Gold Bond Scheme has a term of eight years. However, early purchase is possible after the expiration of five years from the date of issue on the day of the coupon payment.
When and how much power will be available?
According to the Press Release of Reserve Bank of India ie RBI dated 27th January 2023, the early redemption of Gold Bonds in SGB 2016-17 Series 1 – Issue Date 5th August 2016 is after the fifth year from the date of issuance of such Gold Bonds the interest is paid. The due date for the early purchase of this installment will therefore be February 4, 2023. (Because February 5, 2023 is a Sunday).
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The RBI further said that SGB’s redemption price will be based on the simple average of the closing price of 999 purity gold. This will be Monday to Friday as per the India Bullion and Jewelers Association Limited (IBJA) release. The press release states that the redemption price for the outstanding early withdrawal on February 4, 2023 will be Rs 5717 accordingly. This price per SGB unit is based on the simple average of the gold closing price for the week of January 23-27, 2023.
Tax regulations for the early withdrawal of government gold bonds
The interest rate on the bond was set at 2.50 percent pa. Interest earned on government gold bonds is taxable according to the tax class applicable to the investor. Remember that there is no withholding tax or TDS under the Sovereign Gold Bond Scheme.
At maturity, capital gains on government gold bonds are completely tax-free. If investors want to withdraw money before the end of the eight-year term, investors have to pay taxes. Long-term capital gains are taxed at 20% when withdrawn early with an indexation benefit.
Explain that SGBs are issued by regular commercial banks (excluding small financial banks, payment banks and regional rural banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices and stock exchanges NSE can And is sold through BSE.
