BESIDES A HALF-YEARLY INTEREST OF 2.75% ON BOND VALUE , WHAT OTHER POINTS SHOULD ENCOURAGE / DISCOURAGE INVESTORS TO BUY THESE BONDS ?
The Government of India will be launching the Sovereign Gold Bonds Scheme soon. As investors will get returns that are linked to gold price, the scheme is expected to offer the same benefits as physical gold. They can be used as collateral for loans and can be sold or traded on stock exchanges.
The Benefits of Sovereign Gold Bonds Scheme are
1.The Sovereign Gold Bonds will be available both in demat and paper form.
2.The tenor of the bond is for a minimum of 8 years with option to exit in 5th, 6th and 7th years.
3.They will carry sovereign guarantee both on the capital invested and the interest.
4.Bonds can be used as collateral for loans.
5.Further, bonds would be allowed to be traded on exchanges to allow early exits for investors who may so desire.
6.In Sovereign Gold Bonds, capital gains tax treatment will be the same as for physical gold for an ‘individual’ investor. The department of revenue has said that they will consider indexation benefit if bond is transferred before maturity and complete capital gains tax exemption at the time of redemption.
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- in case physical gold market price depreciates , what happens to my gold bond value ? will that depreciate too ? what happens in opposite scenario of price appreciation ?
- can these be used to get collateral margin by our stock brokers for trading ?
- can you kindly explain point 7 in more detail please ?
1.As the price of gold may be taken from the reference rate, as decided, and the Rupee equivalent amount may be converted at the RBI Reference rate on bond. Appreciation or depreciation depends on price
2. As its Bond , It can be used as collateral margin, and it depends on broker