Gold Bond: FD and Post Office schemes all fail in front of gold!.. Money doubled with SGB

Recently, after the reduction of import duty in the budget, there was a big drop in the price of gold, but after this, gold has again reached close to 70 thousand. Meanwhile, the government has announced the final redemption price of another installment of Sovereign Gold Bond. Its price is Rs 6,938 per gram. The government has fixed the redemption price as the average price from 29 July to 2 August. This installment of Sovereign Gold Bond was issued on 5 August 2016.

The Reserve Bank of India had issued gold under this scheme at the rate of Rs 3,119 per gram in August 2016. In such a situation, investors who invested money under SGB have got good returns. By the time it reached maturity, it has given more than double the return on investors’ gold. According to calculations, this scheme has given a return of 122 percent in 8 years.

According to RBI rules, any investor in Sovereign Gold Bond can sell gold before time and cash out the profit. In such a situation, after the announcement of the redemption price of Gold Bond by RBI, if someone wants to sell gold under SGB now, he will get 2.2 times the money. Therefore, if someone had invested Rs 1 lakh in Sovereign Gold Bond 2016 during this period, he would have got Rs 2.22 lakh today.

How much fixed interest do you get
Under this scheme, investors are given a fixed return of 2.75 percent. In such a situation, the total return that investors have received in eight years is 144 percent. That is, the CAGR has been 12 percent. The redemption date has been fixed as August 5, 2024.

How to do SGB premature redemption?
For SGB premature redemption, investors can contact the bank/Stock Holding Corporation of India Limited (SHCIL) office/post office/agent 30 days before the coupon payment date. After the request is accepted, the money will be sent to the given bank account. Premature payment and interest are paid within 10 days.

Tax on premature withdrawal
Sovereign gold bond returns are divided into two types. Capital benefit received on bond maturity and half-yearly interest income. RBI says that interest on the bond will be taxable as per the provisions of the Income Tax Act, 1961 (43 of 1961). Capital benefit arising to an individual on redemption of SGB is exempted from tax. Indexation benefit will be given on long term capital gain arising to any individual on transfer of the bond. TDS is not applicable on this bond.