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Government securities denominated in grams of Gold (1 unit= 1 gram)

Issued by the Reserve Bank of India (RBI) on behalf of the Government of India

Sovereign Gold Bond Scheme

• The Government of India in October 2015 launched the Sovereign Gold Bonds

Scheme

• SGB scheme offer investors returns that are linked to gold price and provides

benefits similar to investment in physical gold

• SGBs are issued by the Reserve Bank of India on behalf of the Government of India

and distributed through Agents like banks, designated post offices and Stock

Holding Corp.

• Exchanges to be appointed as Agents from Tranche IV onwards

• SGBs are issued on payment of rupees and denominated in grams of gold and can

be held in demat and paper form

• SGBs can be used as collateral for loans and can be traded on stock exchanges

• Can be bought initially through Stock brokers / Mutual Fund Distributors

• Commission would be between 95-99bps.

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Key Features of SGB

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Key Features Remarks

Gold Bond Form Investors can avail SGB in Demat and Paper

Investment Limit Min. 2 grams and Max. 500 grams in a financial year

Issue/Redemption Price Simple Avg. Price for gold of 999 purity published by IBJA

Tenor 8 years with exit option in 5th, 6th and 7th years

Interest on Bond 2.75% p.a. (semi annual) on the amount of initial investment

Eligible Investors All resident Indians

Secondary Market Tranche I trading commenced from June 13th, 2016

Collateral for Loans Eligible as collateral for loans, Qualify as SLR for Banks

Risk Risk of capital loss if the market price of gold declines

Tax ImplicationCapital gains tax similar to physical goldIndividuals exempted from capital gain tax if SGBs are held till maturityInterest Income taxable as per Sec.43, IT Act 1961.

A better investment option in Gold Sovereign Gold Bonds

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Assured interest of 2.75%

On your initial investment

Ease of availability

Contact your NSE Brokers

Sovereign Guarantee

For redemption amount and interest

Dematerialised

No worries of safety

A better investment option in Gold Sovereign Gold Bonds

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Easy loan

Can be used as collaterals

Tax benefits

No Capital gain tax on redemption

No TDS on interest

Ease to sell anytime

Tradable on NSE

Assurance of purity

No impurity losses while selling

Bullion Jewellery ETF SGB

1 Earning Nil Nil Nil Interest 2.75% pa

2Recurring Expense

Locker charges Locker charges 1% Expense Ratio Nil

3 Cost of Investing Nil Making charges0.5% - 1% Brokerage

Nil

4 Taxation Capital gains tax Capital gains tax Capital gains taxCapital gains tax + Tax on Interest Income*

5 Lock in Nil Nil Nil 5-7 years

6 Loan against Yes Yes No Yes

7 Issuance Direct Direct On Exchange On exchange

8Secondary Market

Com. Exchange and/or jewellers

Jewellers Stock Exchange Stock Exchange

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Gold Bond Comparison

*Individuals exempted from capital gain tax if SGBs are held till maturity

SGB process on NMF II platform

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A) SGB customer creation process• SGB customer ID is not same as IIN• SGB customer ID needs to be created for all investors who wish to invest through NMF II

platform• Click on create new SGB tab – to register a customer for placing orders for SGBs.

SGB Customer creation

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• In case existing IIN is used for SGB customer creation, the investor data as entered for IIN will

populate for SGB Customer creation .

• In case the investor does not want to use existing IIN or does not have an existing IIN , the SGB customer creation can be

done by entering the data in SGB Customer creation screen.

On entering the Investor details, nominee details and joint holder details (if any) the investor is registered to apply for SGBs with SGB customer reference ID.

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For cancellation of SGB order below given screen is required to be used

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Provision to scan Investor Identification document is given vide below menu.

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EOD Report option will facilitate the current status of all transactions entered by Member / distributor for SGBs

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Thank You

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