BANKING AFFAIRS

Detailed explanation-1: -On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.

Detailed explanation-2: -That said, RBI has announced the redemption price of ₹5, 682 per unit for the mentioned bonds. The price is based on the simple average of the closing gold price for the week of January 16-20, 2023. Last year, RBI allowed premature withdrawal of SGB 2017-18 Series V on October 29.

Detailed explanation-3: -Although the Sovereign Gold Bond (SGB) has a tenor of 8 years, it can be redeemed prematurely on coupon payment dates after the 5th year from the date of issue. A charge of ₹150 + 18% GST will be imposed for rematerialisation or redemption.

Detailed explanation-4: -The maturity period of the sovereign gold bond is eight years. However, you can choose to exit the bond from the fifth year (only on interest payout dates).

Detailed explanation-5: -SGBs have an 8-year maturity duration, the capital gains tax is not applicable. However, if you exit after 5 years, capital gains tax will be applicable.