Which of the following is not correct about Sovereign Gold Bond Scheme ........

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Which of the following is not correct about Sovereign Gold Bond Scheme?

The bonds, which will be sold through banks and designated post offices

The tenor of the bond will be for a period of eight years with exit option from 5th year

The interest earned on gold bonds would not be taxable and capital gains tax shall not be levied as in case of physical gold.

The bonds can be bought by resident Indian entities including individuals, HUFs, trusts, universities and charitable institutions.

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Explanation:

First option is correct.

The fourth tranche of the Sovereign Gold Bonds (SGB) scheme opened for subscription. SGB is government securities denominated in grams of gold. It offers an alternative to holding gold in physical form. The scheme was launched by the Union Government in October 2015.

The bond can be purchased from the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Besides, all Bank branches and select Post Offices and Stock Holding Corporation of India Limited will also issue it. In this tranche minimum subscription has been reduced to 1 gram and maximum at 500 gram per person or institution.

Earlier, the minimum denomination was 5 gram. The SGB bonds can be converted into demat form and can be used as collateral for availing loans. Redemption of SGB bonds by an individual is exempted from capital gains tax.

SGB gives an interest of 2.75 per cent per annum and is payable every six months on initial investment.