Sovereign Gold Bond 2017-18 Series II: Gold bond will be available at the highest price so far, gross returns 187%

Sovereign Gold Bond 2017-18 Series II Premature Redemption: The country’s 9th (SGB 2017-18 Series II) will get a chance to sell Bond holders on Tuesday (January 28, 2025) to the Sovereign Gold Bond on Tuesday (January 28, 2025) to the Sovereign Gold Bond at a record redemption price of Rs 7,988. The bond was released on 28 July 2017, so it will be matured on 28 January 2025. By the way, only bond holders can redeem this bond on January 28 before maturity, who have applied for it. The date for applying for interested bond holders regarding premature redemption was from 27 December to 18 January.

How many units of gold bonds have been done so far premature redemption?

Even before this premature redemption, bonders have sold their units in this bond. RBI figures show that bond holders have already redeemed a total of 1,84,201 units of this 9th Sovereign Gold Bond on 5 occasions. Earlier, a total of 23,49,953 units were purchased for this bond. In this way, 21,65,752 units of this bond are still left.

(SGB 2017-18 Series II)

(Source: rbi)

How much is the premature redemption price?

The issue and redemption price for Sovereign Gold Bonds is fixed based on the rate received from IBJA (999) from IBJA (999). According to the rules, for the premature redemption of the initial 9 series of Sovereign Gold Bond, the Closing Price of Gold (999) received from IBJA (999) obtained from IBJA (999) for the week (Monday-Friday) is average for the week (Monday-Friday) for the premature redemption of 9 series. . Whereas for the latter series, it will be the average of the closing price of Gold (999) received from IBJA for Working Days just before the date of maturity. Because this is the ninth series released by RBI. Hence the average closing price of the weekly week before the date of maturity. Due to Saturday and Sunday respectively on 25 January and 26 January, the RBI (RBI) has decided the premature redemption price of this series based on the closing price from January 20 to January 24. The closing price from January 20 to 24 is an average of Rs 7,988, so it is also the premature redemption price of the 9th Sovereign Gold Bond.

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Source: ibja

Now we know that all the bond holders who are these bonds 28 before maturity January How much they will earn will be redeem.

Earning without paying tax

This Sovereign Gold (in0020170034) was released on 28 July 2017 at an issue price of Rs 2,830. While the premature redemption price is Rs 7,988 per unit. Accordingly, the bond holders will get a gross return (capital gain) of 182.26 percent if this series is redeemed before maturity. Online bond holders will be more profitable as they will also get a discount of Rs 50 per unit against the issue price on purchasing this bond. Such bond holders will get a gross return of 187.34 per cent on the premature redemption of this bond.

Earning after paying tax

In the case of premature redemption, bond holders are selling 12 months after being a gold bond issue, so they will have to pay 12.5 % long-term capital gains (LTCG) tax on the capital gains.

Now in case of redeeming this bond before maturity, long-term capital gains, gross returns and annual returns are calculated:

Purchase Price/ Issue Price: Rs 2,830

Redemption Price: Rs 7,988

Taxable Capital Gain: 7,988-2,830 = 5,158 rupees

Long-Term Capital Gain (LTCG) Tax (12.5%): 645 rupees

Earning after paying tax: 5,158 – 645 = 4,513 rupees

Redemption Price (after lowering LTCG tax): 7,988 – 645 = 7,343

Offline bond holder

Gross returns (%): 159.47%

Annual return (CAGR): 12.66%

Online bond holder

Gross returns (%): 164.14%

Annual Return (CAGR): 12.91%

Earning by adding interest

Investors received Rs 2.5 per cent for this series, ie Rs 35.38 per six months while during the holding period of 7.5 years, Rs 531 interest/coupon. In this way, after adding the interest, an annual return (CAGR) of 13.65 percent can be found from this bond. Online bond holders will get an annual return of 13.90 percent. The interest for the series released after September 2016 has been reduced from 2.75 per cent annually to 2.5 per cent.

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Calculation of annual earnings (CAGR) by adding interest on this series of SGB:

Purchase Price/ Issue Price: Rs 2,830

Redemption Price: Rs 7,988

Taxable Capital Gain: 7,988-2,830 = 5,158 rupees

Long-Term Capital Gain (LTCG) Tax (12.5%): 645 rupees

Earning after paying tax: 5,158 – 645 = 4,513 rupees

Redemption Price (after lowering LTCG tax): 7,988 – 645 = 7,343

Interest: Rs 531

Offline bond holder

Gross Return (%): 178.23%

Annual Return (CAGR): 13.65%

Online bond holder

Gross Return: 183.24%

Annual Return (CAGR): 13.90%

Now know what are the rules regarding premature redemption,

When can Premature Redemption?

Investors also have the option to redeem Sovereign Gold Bond before maturity. You can redeem Sovereign Gold Bond before maturity 5 years after its issue. RBI determines the date of premature redemption on the day the interest is payable on this bond. Interest is available on this bond every six months i.e. two times a year.

How is the Premature Redemption Price calculated?

According to the rules, for the premature redemption of the initial 9 series of Sovereign Gold Bonds, the redja (IBJA) received a closing price of Gold (999) received from IBJA (999) for the week (Monday-Friday) for the premature redemption of the early 9 series. Is. Whereas for the latter series, it will be the average of the closing price of Gold (999) received from IBJA for Working Days just before the date of maturity.

What are the rules regarding tax?

If you redeem before the maturity period, it will look like tax -listed financial assets. Meaning that Sovereign sells gold bonds before 12 months, the earnings i.e. capital gains will be considered as short-term capital gains (STCG). Which will be added to your gross total income and you have to pay tax according to your tax slab. But if you sell after 12 months, then 12.5 percent long-term capital gains (LTCG) tax will have to be paid. But if you hold Sovereign Gold Bond for its maturity i.e. 8 years, then you will not have to pay any tax at the time of redemption.

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