If you had invested in tranche 2 and tranche 4 of sovereign gold bond (SGB), you may go for untimely redemption of the identical on 5 August and eight August at a problem worth of ₹4,804 per unit, set by the Reserve Bank of India (RBI).
The redemption worth is about based mostly on the straightforward common closing gold worth of 999 purity revealed by the India Bullion and Jeweller’s Association Ltd (IBJA) of the week (Monday-Friday) previous the date of redemption.
If buyers of those bonds decide to redeem it, they might achieve this for absolute beneficial properties of 85% (13% CAGR) and 54% (9% CAGR) respectively. The SGB 2016 1, that’s the tranche 2, was issued at ₹2,600 per unit, whereas sequence 1 of 2016-17 gold bonds at ₹3,119 per unit.
SGBs are issued for a tenure of eight years however one can redeem sovereign gold prematurely after 5 years. The untimely redemption window opens each six months on the date of the curiosity credit score.
Investors need to submit a redemption request to the financial institution/publish workplace or agent they bought the bonds from not less than at some point earlier than the cost date. Gains on SGBs are tax-free on maturity.
However, there’s a lack of readability on taxation on untimely redemption. According to some consultants, in case of untimely redemption, the beneficial properties might be taxed as long-term capital beneficial properties and therefore buyers should pay a tax of 20% after adjusting the acquisition worth for indexation.
An individual choosing untimely withdrawal can strategy the involved financial institution or stock-holding company, publish workplace, or agent 30 days earlier than the coupon cost date.
Requests for untimely redemption can solely be entertained if the investor approaches the involved financial institution or publish workplace not less than at some point earlier than the coupon cost date. The proceeds might be credited to the shopper’s checking account supplied on the time of making use of for the bond.
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