If you have invested in Tranche 2 and Tranche 4 of the Sovereign Gold Bond (SGB), you can opt for early redemption of the same at the issue price on August 5th and 8th. ￡4,804 per unit set by the Reserve Bank of India (RBI).
The redemption price is set based on the simple average closing price of 999 purity issued by India Bullion and Jeweller’s Association Ltd (IBJA) in the week prior to the redemption date (Monday to Friday).
If investors on these bonds choose to redeem it, they will do so for an absolute profit of 85% (13% CAGR) and 54% (9% CAGR), respectively. SGB 2016 1, or Tranche 2, ￡2,600 per unit, 2016-17 Gold Bond Series 1 ￡3,119 per unit.
The SGB will be issued for 8 years, but after 5 years you can redeem your sovereign gold prematurely. The early redemption window opens every 6 months on the day of interest credit.
Investors must file a redemption claim with the bank / post office or agency that purchased the bond at least one day before the payment date. SGB profits are tax exempt at maturity.
However, the taxation of premature redemption has not been clarified. According to some experts, in the case of early redemption, the profit is taxed as a long-term capital gain, so investors are required to pay 20% tax after adjusting the purchase price of the index.
If you choose to withdraw early, please contact the bank, holding company, post office or agency at least 30 days before the coupon payment date.
Early redemption requests can only be accepted if the investor contacts the bank or post office at least one day before the coupon payment date. The proceeds will be credited to the customer’s bank account provided at the time of bond application.
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Sovereign Gold Bond Tranches 2 and 4 can be redeemed for £ 4,804 per unit.
Source link Sovereign Gold Bond Tranches 2 and 4 can be redeemed for £ 4,804 per unit.