How-to SGB Primary market

Bid for SGBs at primary issuance

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Sovereign Gold Bonds (SGBs) are government-backed gold-linked instruments issued by RBI in tranches. Online subscribers via brokers like Zerodha get a Rs 50/g discount.

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with Zerodha.

Step-by-step procedure

Five steps per the procedure infobox.

SGB key features

  • Coupon: 2.5% per annum on initial issue price, paid semi-annually.
  • Capital appreciation: Linked to gold price at maturity.
  • Tenor: 8 years.
  • Premature exit: From 5th year onwards on coupon dates.
  • Tax: LTCG exempt at maturity; coupon taxed as interest.

Pricing

Issue price set by RBI based on average gold price over 3 days before tranche opens. Online subscribers get Rs 50/g rebate.

See also

External references

References

  1. RBI, Sovereign Gold Bond Scheme, rbi.org.in.
  2. Income Tax Act 1961, Section 47(viic) and 48 (SGB capital gains exemption).

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