Gold bonds surge 4x in FY24

Since the inception of SGB scheme in Nov 2015, a total of Rs72,274 cr (146.96 tonne) has been raised through 67 tranches

Mumbai: Sovereign gold bonds have caught the fancy of investors, who bought Rs27,031 crore worth of the bonds last fiscal, an amount more than four times invested in 2022-23 on the prospects of higher returns and tax benefits.

The bonds bought by investors represented a whopping 44.34 tonne of gold during 2023-24. In 2022-23, Sovereign Gold Bonds (SGBs) representing 12.26 tonne of gold were purchased for Rs6,551 crore.

“The aggregate sum raised during 2023-24 amounted to Rs27,031 crore (44.34 tonne),” said the annual report of Reserve Bank, which issues the bonds on behalf of the central government. During the fiscal ended March 2024, the bonds were issued through four tranches. Since the inception of SGB scheme in November 2015, a total of Rs72,274 crore (146.96 tonne) has been raised through 67 tranches. The price of 24 karat per 10 gram of gold has gone up from about Rs62,300 to Rs73,200 in one year. SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. These bonds are exempt from capital gains tax. Besides, the bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment.

SGBs are issued in denominations of one gram of gold and in multiples thereof. Minimum investment should be one gram with a limit of 4 kg subscription for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government from time to time per fiscal year (April – March). SGBs are sold through offices or branches of nationalised banks, Scheduled Private Banks, Scheduled Foreign Banks, designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL) and the authorised stock exchanges either directly or through their agents.