Anybody invest in Sovereign gold bonds?

[Deleted member 9785]

Anybody buying SGB from NSE or BSE as they are trading at almost 5% discount to market price of 24 carat gold?

Is there any capital gain tax when the govt will give the redemption money on due date?

 

[birususama]

Yes had bought SGB recently from BSE. Yes SGBs trade at discount because of liquidity.
Capital gains arise only if you sell your SGBs prematurely otherwise there is no capital gains. But the 2.5% interest paid is considered as taxable income.

 

[Souvik]

Since liquidity is low in secondary market, I refrain from buying it as disposal/sell might be difficult. Also that 2.5% interest is too low for downside risk even for gold.

 

[AshishR]

redemption money on due date is tax free

 

[Deleted member 9785]

Since liquidity is low in secondary market, I refrain from buying it as disposal/sell might be difficult. Also that 2.5% interest is too low for downside risk even for gold.

its not that low. At max u may have to sell 1% lower than prevailing LTP. Also 2.5% is just interest part. Capital gain can be huge. Gold has almost increased at same rate like sensex in last 15 years

 

[lhgeek]

Yes. I use this page to help pick the best bond.

https://fincues.com/goldbonds

 

[Deleted member 9785]

Yes. I use this page to help pick the best bond.

https://fincues.com/goldbonds

How have they computed discount to fair value?

 

[Deleted member 9785]

Breaking: Gold Price surges to the all-time high above $2,130 on weaker US, Fed rate cut bet

Gold prices (XAU/USD) climbs to the all time-high above $2,100 psychological round mark during the early Asian session on Monday.

www.fxstreet.com

Gold is the place to be as fiat collapses under its own weight

 

[Deleted member 9785]

Gold likely to touch Rs 70,000 in 2024, say experts

Gold prices are expected to reach Rs 70,000 per 10 grams in the domestic market in 2024, driven by a stable rupee, geopolitical uncertainties, and slowing global economic growth. The price has reached record highs in the Middle East and India, reaching Rs 61,845 per 10 grams on May 4 and USD...

economictimes.indiatimes.com

will it follow the sensex?

 

[Deleted member 9785]

i think gold will reach 1 lac before sensex

 

[CXO]

SGB is not gold. It is merely pegged to gold price. Just be aware of this.

 

[TheGuy]

SGB is not gold. It is merely pegged to gold price. Just be aware of this.

It is just another Govt. Bond.

 

[CXO]

It is just another Govt. Bond.

Yes, that pays you a tiny 2.5% interest (when inflation is close to 7%) 🙂

 

[moneyMaker]

https://sovereigngoldbonds.rbi.org.in

SGB Analyzer - Analyze Sovereign Gold Bonds (SGBs) & Identify cheaper SGBs on Discounts over Current Gold Price

A Personal Finance tool to analyze Sovereign Gold Bonds (SGBs), identify discounted on SGBs compared to their fair value & Current Gold Price.

sgbanalyzer.com

G

 

[anisharya16]

yes I bougth SGB from upstox and HDFC Bank Net Banking. For tax: Lockin period of 5 years, and maturity of 8 years. If you plan to sell your SGB between 5-8 years then you have to pay tax as per tax slab. Yes the interest that you earn half yearly (1.25%) which yearly is 2.5% will be taxable as per your tax slab (will come under "Income from other sources") irrespective of SGB maturity.

 

[TheGuy]

Yes, that pays you a tiny 2.5% interest (when inflation is close to 7%) 🙂

Interest is just cherry on Sundae. Real benefits are discount to real gold (50 per gm), no GST, and tax free nature after 8 years.

 

[CXO]

Real benefits are discount to real gold (50 per gm), no GST, and tax free nature after 8 years.

But it is not real gold.

 

[anisharya16]

But it is not real gold.

Sgb applications are clocked at current gold price (moreover, u get it at discounted price), and imitates as gold as it moves up or down. It's gold.

 

[lostwords]

Sgb applications are clocked at current gold price (moreover, u get it at discounted price), and imitates as gold as it moves up or down. It's gold.

Exactly. Plus when you add making charges, locker charges and GST the ROI of real gold is low compared to SGB.

 

[anisharya16]

Exactly. Plus when you add making charges, locker charges and GST the ROI of real gold is low compared to SGB.

Exactly, in Real gold vs Digital gold vs Gold ETFs vs SGB, SGB will stand out and always be on top in terms of security, stability and return rate. People don't realise it.