Sovereign Gold Bonds scheme 2015 launched by Narendra Modi: All you wanted to know in 5 points

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PM Narendra Modi has launched 3 schemes aimed at reducing physical gold demand and fish out 20,000 tonnes of idle yellow metal in Indian homes and among them is the Sovereign Gold Bonds scheme 2015. As investors will get returns that are linked to gold price, the scheme is expected to offer the same benefits as physical gold. These can be used as collateral for loans and can be sold or traded on stock exchanges. PM Modi has also unveiled first ever India gold coin & bullion bearing national emblem Ashok Chakra and Mahatma Gandhi's image. These are essential to discourage gold imports, says FM Arun Jaitley. here is all you wanted to know about the Sovereign Gold Bond scheme in 5 points:

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1. Sovereign Gold Bonds scheme 2015: Benefits – Gold bonds are a government securities denominated in grams of gold. Sovereign Gold bonds are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Sovereign Gold Bond is issued by Reserve Bank of India (RBI) on behalf of Government of India. The Sovereign Gold Bonds will be available both in demat and paper form;

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2. Sovereign Gold Bonds scheme 2015: Benefits – The tenor of the bond is for a minimum of 8 years with option to exit in 5th, 6th and 7th years;

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3. Sovereign Gold Bonds scheme 2015: Benefits – In Sovereign Gold Bonds, capital gains tax treatment will be the same as for physical gold for an 'individual' investor. The department of revenue has said that they will consider indexation benefit if bond is transferred before maturity and complete capital gains tax exemption at the time of redemption. They will also carry sovereign guarantee both on the capital invested and the interest;

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4. Sovereign Gold Bonds scheme 2015: Benefits – Bonds can be used as collateral for loans;

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5. Sovereign Gold Bonds scheme 2015: Benefits – Bonds would be allowed to be traded on exchanges to allow early exits for investors who may so desire; further, Sovereign Gold Bond scheme would allow it to be traded on exchanges to allow early exits for investors who may so desire.