Investors of 34 installments of Sovereign Gold Bond (SGB) can withdraw their money. The question is whether they should withdraw their money or maintain till maturity? According to the Reserve Bank of India (RBI), 34 installments of SGB are going to be matured between April and September this year. In many of these installments, investors can withdraw money before maturity. The RBI allows SGB investors to withdraw their money before maturity. He publishes a list of such installments twice a year, whose investors can withdraw money before maturity.
SGB gets matured in 8 years
Sovereign Gold Bonds ,SGB) Matures get matured in 8 years. It has a lock-in period 5 years. This means that investors can withdraw their money only after 5 years of investment. SGB stocks are listed on markets. But the trading volume is quite low. Therefore, RBI allows investors of SGB to withdraw their money on completion of 5 years, 6 years and 7 years. The RBI has announced the Redemption Price for the installment of October 15, 2019. Investors of this installment will be able to withdraw their money on April 15, 2025. The investors of this issue were allotted SGB by RBI at a price of Rs 3,785 per gram. Inucers of this issue will be able to withdraw their money at a rate of Rs 9,069 per gram.
Capital Gens exemption on redemption through RBI
The specialty of SGB is that its investors do not have to pay any kind of capital gains tax. Second is that annual interest is also available in the investment period. However, the capital gains tax is exempted only when you use RBI window to withdraw your money from SGB. If you sell your sovereign gold bonds on the stock exchange, then you will have to pay a capital gense tax on the profits on it.
2.5% interest annually in investment period
Sourav Ghosh, co-founder of the online bond platform giraffe, said, “SGB investors also get 2.5 per cent interest annually besides the increase in gold prices. When the world has turmoil, it becomes difficult to guess about the price of gold. But, it is certain that the SGB has become quite attractive.” The government has stopped the SGB scheme due to a continuous jump in gold prices. The government has not introduced any new installment since February last year.
What should you do?
Experts say that the way the prices of gold are seeing a rise, there is an advantage in maintaining their investment in SGB. If any investor does not need money yet, then he should maintain his investment maturity i.e. 8 years. If money is needed, then Investor can withdraw his investment in SGB before maturity. It would be good to use RBI window for this. In view of the way gold prices have increased, investors will get great returns on their investment.