The fourth tranche of the Sovereign Gold Bond Scheme (SGB) opened for subscription on Monday with the government going all out through a major advertisement campaign to woo investors. Market experts believe that the bonds could be a good buy at a time when the long-term outlook for gold is positive with price of the previous metal likely to move up.
But do you know who all can buy the bonds, how much you can buy and for whom you can buy?
While the maximum cap for holding per individual is set at an equivalent price of of 500 grams of gold, in case you want to exceed the limit, you can do so by by purchasing bonds in the name of your other family members. The 500 gram limit is applicable for each family member. So if you are four-member family, and meet the eligibility criteria for buying the bonds, the total family holding of Sovereign Gold Bond (SGB) can go up to 2,000 grams. The bonds can be bought on behalf of a minor by the guardian.
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The price for each gram of gold for the purpose of SGB has been fixed at Rs 3,119.
As per the eligibility norms, SGB can be purchased by any person resident in India as per the Foreign Exchange Management Act, 1999. This includes individuals, Hindu Undivided Family, Trusts, universities and charitable institutions.
The 500 gram limit applies for each financial year (April-March) for each individual. So, if you have purchased 500 grams in the earlier three tranches of SGB which came during the previous financial year, you can buy another 500 grams in this tranche. However, if the cap is reached and another tranche comes up during the financial year you will be ineligible to purchase in your name again.
You can also go in for joint holding of the bonds. Thus a husband-wife duo can buy jointly. However, the 500 grams limit will be applicable to the first holder. So if the joint holding is in the name of X and Y, with X as the first applicant name, then the 500 gram limit will apply to X for the financial year. Thus, Y can buy another 500 grams individually or through joint holding with another person (including X) as the second holder.
The bonds are open for subscription till July 22.