Sovereign Gold Bond 2023-24: Series 4; Check Price, Issue Dates, and More.

12 min read • Published 15 June 2023
Written by Vaibhav Khandelwal

The Sovereign Gold Bond tranche 2023-24 new tranches have been announced.

The Reserve Bank of India (RBI) has launched the Sovereign Gold Bond Scheme 2023-24 Series 4 issuance. The primary subscription for the SGB 2023-24 series 4 will commence in February. The price is fixed in INR based on the average price of the last 3 working days of 999 purity gold published by India Bullion and Jewellers Association Limited (IBJA) before the issue date. Investors applying online and making payments through digital channels get a ₹ 50 discount on the issuance price.

In this blog, you’ll find all the details of SGB tranche 2023-24, series IV, its price, how to buy, and crucial things to know before investing in SGBs. We have also listed the upcoming issue dates of SGB 2023-24.

Sovereign Gold Bond Scheme 2023-24 New Tranche: Key Dates

For Series 4 of SGB 2023-24, the subscription will be from February 12 – February 16, 2024, and the issue date is February 21, 2024. The issue date, i.e. when the units will be allotted to you, is February 21, 2024. The price for SGB 2023-24, series 4 is Rs. 6263 per gram.

The details of the new tranches of SGB 2023-24 are as follows:

TrancheDate of SubscriptionDate of IssuePrice
2023-24 Series IVFebruary 12 – February 16, 2024February 21, 2024Rs. 6263 Per Gram
** Note: The issue date means the bond units will be allotted to you on this date

SGB Scheme 2023-24 Series 1 & 2

The details of tranches 1 & 2 of the Sovereign Gold Bond, issued in June and September 2023, are as follows:

TrancheDate of SubscriptionDate of IssueIssue Price
2023-24 Series IJune 19 – June 23, 2023June 27, 2023₹5,926/- For investing online, ₹5,876/-
2023-24 Series IISeptember 11 – September 15, 2023September 20, 2023₹5,923/- For investing online, ₹5,873/-
2023-24 Series IIIDecember 18 – December 22, 2023December 28, 2023₹6199/- For investing online, ₹6,149/-

What is a Sovereign Gold Bond?

Sovereign Gold Bonds (SGBs) are government security issued by the Reserve Bank of India (RBI) on behalf of the Government of India. They are issued in denominations of one gram of gold and are linked to the market price of gold.

The RBI annually issued the Sovereign Gold Bond Scheme 2023-24 Series in multiple tranches. Series 1 was released on June 19, and Series 2 on September 11. A discount of Rs. 50 per gram is given on the nominal value to encourage investment in online transactions.

SGBs are a convenient alternative to holding physical gold. They are denominated in grams, with the smallest unit being 1 gram. The face value of the bond is determined based on the average closing price of gold (999 purity) over the last three business days before the subscription period, as published by the Indian Bullion and Jewelers Association Limited (IBJA).

How to Invest in Sovereign Gold Bonds 2023-24?

You can apply for SGB from scheduled commercial banks such as HDFC Bank and SBI, authorised post offices, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL) and stock exchanges including the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) or agents. Buying them from small finance or regional rural banks is not available.

Sovereign Gold Bonds Interest Rate and Returns

The maiden tranche of SGB was issued in November 2015 at Rs 2,684 per unit, and it matured on November 30, 2023, at Rs 6,116 per gram of gold. The approximate return earned by investors was 128%.  In addition to the potential for capital gains, SGBs offer investors a fixed interest rate of 2.5% per annum, which is paid semi-annually.

Please note the returns are not guaranteed as they depend on the price of gold at the time of maturity.

Loan Against SGBs

Sovereign Gold Bonds can be used as collateral when borrowing from financial institutions and non-banking financial companies. The SGB loan-to-value ratio equals the ordinary gold loan prescribed by the RBI. Furthermore, granting loans against SGBs is subject to the decision of banking institutions. The minimum and maximum loan amount also varies from bank to bank. The lending institution will demand the pledge of SGBs in Demat or a physical certificate form as security.

Maximum Subscription Limits for Sovereign Gold Bond

The maximum subscription limit for SGBs varies depending on the type of investor:

  • Individuals can invest up to 4 kilograms.
  • Hindu Undivided Families (HUFs) can subscribe for 4 kilograms.
  • Charitable institutions and trusts can acquire around 20 kilograms of gold per fiscal year.
  • In the case of joint investments, the 4-kilogram limit applies only to the first applicant.
  • The annual ceiling includes bonds obtained through the initial issuance by the government and those purchased from the secondary market.

Benefits Of Investing In Sovereign Gold Bond Tranche 2023-24 (Series 2)

  • Safety and Security: SGBs are issued by the government through the RBI, providing high safety and security for investors.
  • Alternative to Physical Gold: SGBs serve as a convenient substitute for holding physical gold. Investors can gain exposure to the price movements of gold without the hassle of storing and safeguarding physical gold.
  • Capital Appreciation: Like physical gold, SGBs offer the potential for capital appreciation. If the price of gold rises over time, the market value of the bonds also increases, allowing investors to benefit from price appreciation.
  • Fixed Interest Income: SGBs provide a fixed interest rate of 2.5% annually, payable semi-annually. This interest income offers an additional source of earnings for investors.
  • Tax Benefits: If held until maturity, the capital gains arising from their redemption are tax-free.
  • No Making Charges or Storage Costs: Unlike physical gold, SGBs do not involve making charges or storage costs. Investors can avoid expenses related to making charges and secure storage facilities.

What is the Eligibility to Invest in SGB Scheme 2023-24?

  • An Indian resident as defined under FEMA 1999
  • Individuals, HUFs, trusts, universities and charitable institutions
  • Individual investors with subsequent change in residential status from resident to non-resident may continue holding SGB until early redemption/maturity.

Benefits Of Investing In Sovereign Gold Bond Tranche 2023-24 (Series 3&4)

The following are the benefits of investing in SGBs:

  • Safety and Security: SGBs are issued by the government through the RBI, providing high safety and security for investors.
  • Alternative to Physical Gold: SGBs are a convenient substitute for holding physical gold. Investors can gain exposure to the price movements of gold without the hassle of storing and safeguarding physical gold.
  • Capital Appreciation: Like physical gold, SGBs offer the potential for capital appreciation. If the price of gold rises over time, the market value of the bonds also increases, allowing investors to benefit from price appreciation.
  • Fixed Interest Income: SGBs provide a fixed interest rate of 2.5% annually, payable semi-annually. This interest income offers an additional source of earnings for investors.
  • Tax Benefits: If held until maturity, the capital gains arising from their redemption are tax-free.
  • No Making Charges or Storage Costs: Unlike physical gold, SGBs do not involve making charges or storage costs. Investors can avoid expenses related to making charges and secure storage facilities.

Taxation on Sovereign Gold Bonds 2023-24

The taxation on SGB is as follows:

Tax on interest income

The interest income from Sovereign Gold Bonds is taxable as per the provisions of the Income Tax Act of 1961. The interest income is added to your total income, and the tax is charged per your applicable tax slab.

Tax on Capital Gains

Capital gains refer to the gains you earn due to appreciation in the underlying asset’s price. For example, if you purchased the SGB at the price of ₹45,000 per 10 grams and on maturity the price is ₹47,000/-, then your capital gains are ₹47000 – ₹45000 = ₹2000/-.

In case of redemption before maturity

  1. Short-term Capital Gains Tax

If you sell the bond before the completion of 1 year after investment, your gains will be charged as short-term capital gains (STCG) tax. The STCG charged to you will be the same as the income tax slab applicable to you as per your income (including the Short term capital gains).

  1. Long-term Capital Gains Tax

If you sell the SGB after 1 year, you are taxed at 10% without indexation benefits or 20% with indexation benefits. Index means that the actual capital gains are calculated after accounting for the bond’s purchase price inflation.

Payment Options for SGBs

When you invest in SGBs, you only need to pay the issue cost in cash (up to a maximum of Rs. 20,000/-), demand draft, cheque, or through electronic banking. Upon maturity, you will receive the market value of gold at that time. Unlike purchasing physical gold, there are no additional charges like GST or charges associated with buying SGBs.

How Can You Check the SGB Status?

There is no guarantee of allotment of SGBs in the primary issue. The units are allotted on a lottery basis. If you subscribed to the bond, the units will be visible in your demat account on the date of allotment. If you invested offline, you can get the investment certificate from the issuing bank, SHCIL offices, Post Offices, Designated stock exchanges, or agents.

Additionally, you will get a digital copy of your investment certificate on your registered email address.

Sovereign Gold Bond Issue Price History

The SGB issue price history for FY 2022-23 is as follows:

SeriesMonthPrice per Gram
Series 1June 2022Rs. 5,041
Series 2August 2022Rs. 5,091
Series 3December 2022Rs. 5,409
Series 4March 2023Rs. 5,611

The SGB price history for FY 2021-22 is as follows:

SeriesMonthPrice per Gram
Series 1May 2021Rs. 4,777
Series 2May 2021Rs. 4,842
Series 3June 2021Rs. 4,889
Series 4July 2021Rs. 4,807
Series 5August 2021Rs. 4,790
Series 6September 2021Rs. 4,732
Series 7October 2021Rs. 4,765
Series 8November 2021Rs. 4,791
Series 9January 2022Rs. 4,786
Series 10March 2022Rs. 5,109

How to Redeem the Sovereign Gold Bonds after 8 Years of Maturity?

The Sovereign Gold Bonds have a maturity of 8 years. Once the tenure of 8 years is completed, you will be notified one month before the maturity date. On maturity, the final amount will be credited to your bank account, already mentioned in the certificate. If you have bought the units in demat form, the amount will be credited to your demat-linked bank account, and the units will be auto-debited. 

The redemption price will be determined in INR based on the average price of the last 3 working days of 999 purity gold published by India Bullion and Jewellers Association Limited (IBJA) before the maturity date.

Reference Link

https://ibja.co/

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1984145

Frequently Asked Questions (FAQs)

Who issues SGBs?

The RBI issues the Sovereign Gold Bonds on behalf of the Government of India.

Is TDS applicable on the Sovereign Gold Bond scheme 2023-24?

TDS is not applicable on Sovereign Gold Bond tranche 2023-24 Series 3&4; however, there will be a tax on STCG according to income slab and LTCG of 20%+ indexation benefits if sold before maturity. SGBs held till maturity are tax-exempt.

What are the risks involved in SGB investment?

The primary risk in investing in Sovereign Gold Bonds (SGBs) is the fluctuation of gold prices. However, no risk is associated with the interest earned, as the Government of India (GOI) guarantees. Furthermore, the quantity of gold held as part of the investment remains secure.

Can non-residents of India invest in SGB Feb’24 tranche?

A Non-Resident Indian cannot invest in Sovereign Gold Bonds as per the Foreign Exchange Management Act (FEMA), 1999. However, an NRI who has already invested in SGB before receiving his NRI status can hold the bond until its maturity or demand premature redemption.

Is it good to invest in SGB tranche 2023-24?

Whether you should invest in SGB in 2023 depends on your investment objectives. Here are some factors worth considering:
Your risk tolerance – While SGBs are generally considered a secure investment option, it’s important to note that the price of gold can also fluctuate.
Your investment goals – SGBs can be an investment avenue for individuals aiming to save on taxes while earning guaranteed returns.
Gold price – It’s essential to consider the gold value when making an investment decision regarding SGBs. Gold prices are high now. If you believe that the future trajectory of gold prices may experience an uptrend, it might be prudent to invest in SGBs now.
Evaluating these factors will help determine whether investing in SGBs aligns with your situation and objectives.

Can I sell a sovereign gold bond at any time?

Yes, you can sell gold at any time. If you want to redeem your SGBs in the first five years, a stock exchange mechanism is the only way. After 5 years, you can redeem your SGB investment with the RBI or sell it in the secondary market.

Is sovereign gold bond scheme a good investment?

Sovereign gold bond scheme 2023-24 is a good investment to earn fixed returns while saving taxes.

What is the average return of a sovereign gold bond?

The return on SGB is a 2.5% interest in addition to the capital appreciation.

Is a demat account needed for buying sovereign gold bonds?

If you want to buy sovereign gold bonds through your broker, you will need a demat account. However, if you want to purchase SGBs offline from banks or the post office, you do not need a demat account.

Is a sovereign gold bond better than SIP?

SIPs involve substantial risk due to market volatility, but their returns are usually higher. SGBs, on the other hand, are considered lower-risk instruments with fixed returns.

Can SGB be converted to physical gold?

No, you cannot convert sovereign gold bonds to physical gold. The bonds are available in digital or paper format only. You can sell and convert them to cash and use the money to buy physical gold.

Can I buy SGB every month?

Yes, you can buy SGB every month from the secondary market, but the total SGB purchased in a year should not exceed 4kgs.

What is the price of SGB Feb 2024?

The price for series 4 of SGB 2023-24 is set as Rs. 6263 per gram. Please note, if you are buying in demat form, you will receive a discount of Rs. 50, and your purchase price will be Rs. 6213 per gram.

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Vaibhav Khandelwal

Credit Principal
Vaibhav is Chartered Accountant by profession, having experience of 4+ years in banking & finance sector. Since past one year associated with Wint Wealth as Credit Principal. Previously worked with Northern Arc Capital for 2 years in FI-Credit Team and AU Small Finance Bank for 1 year in LAP-Credit Team.

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