Saturday, January 30, 2021

Sovereign Gold Bond Scheme 2020-21–Series 11 - Why invest in Sovereign Gold Bonds?

 

Sovereign Gold Bond Scheme 2020-21–Series 11 - Why invest in Sovereign Gold Bonds?


Sovereign Gold Bond Scheme 2020-21 – Series 11

> Issue Details -Issue Open Monday, February 01, 2021 To Friday, February 05, 2021.

> Live on Monday February 01, 2021.

> Why Invest in Gold : Gold – An asset class to consider:
  1.  Provides hedge to your portfolio in volatile times.
  2. Gold also helps in portfolio diversification due to its low correlation with other asset classes, such as Equity & Fixed Income - asset diversification among Equity, Debt & Gold – essential to beat volatility of any particular asset class.
  3. Wealth managers believe investors should allocate 10-15% of their portfolio funds to Gold as it acts as an insurance against global uncertainty & rupee depreciation.
Why invest in Sovereign Gold Bonds :
> Returns : Interest of 2.5% on the issue price & which is payable of half yearly basis + Appreciation of Gold.
> Safety : Sovereign Guarantee on redemption of money (principal) as well as on the interest earned.
  * Elimination of risk & hassle-free holding as it eliminates cost of Storage as in Physical Gold.
> Liquidity : Tenure of 8 years with exit options in fifth, sixth & seventh year.
  * Tradeable on stock exchanges from the date to be notified by RBI.
> Taxation Benefit : Exemption from Capital Gains Tax on redemption.
  *  No TDS Applicable on Interest paid.
  * Indexation Benefit :  Will be provided on Long Term Capital Gains arising to any person on transfer of bond.
> Collateral : Accepted as collateral – Can be kept as collateral / security against Secured Loans.
Disclaimer : Please consult your Tax consultant for Taxation purposes.

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