How to buy Sovereign Gold Bonds (SGB) on the stock market?

Sovereign gold bonds (SGB) were introduced by the government in 2015. The SGB offers a better option than storing gold physically as there are no dangers or expenses associated with storage. The market value of gold at the time of maturity and the monthly interest are guaranteed. investorsThe bonds are stored in the Reserve Bank of Indiarecords or in demat format, eliminating the possibility of loss of securities and other problems.

How to buy Sovereign Gold Bonds (SGB) on the stock market?

Sovereign Gold bonds It can be brought from the primary market during the window when the government announces the dates or from secondary market from the secondary market through the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

If you miss the opportunity to apply for SGBs during the primary issue, you can invest in them through stock exchanges in the secondary market.

Like any other security, the price of SGBs on the secondary market is based on supply and demand. SGBs are typically traded below the spot price of gold.

How to buy SGB through the stock market

To buy SGB through stock marketfollow the steps mentioned:
Step 1: You can find the discounted SGB/high yield SGB on NSE or BSE>
Step 2: Find the SGB script code in your demat account and place a buy order.
Step 3: Bonuses will be credited to your demat account within T+1 business day from the transaction.

Taxes
According to the HDFC Bank website, “The tax treatment differs if you exit your Gold Bond investment early. There are two popular ways to exit a Gold Bond investment; the first is through the early redemption window at the end of 5 years, and the second is to sell your bonds in the secondary market. In both cases, the capital gains will be taxable according to the usual definition of short-term and long-term capital gains. If it is the former, the applicable rate will be the highest. If it is the latter, then the investor can choose between a flat tax rate of 10% or 20% after taking into account indexation.”

Below are important FAQs from the NSE website regarding SGBs.
Can SGB be marketed?
The bonds will be tradable from a date to be notified by the Reserve Bank of India. (It may be noted that only bonds which are in dematerialised form in deposits can be traded on the stock exchanges.) The bonds can also be sold and transferred under the provisions of the Government Securities Act, 2006. Partial transfer of bonds is also possible.

Can an SGB offer be cancelled once it has been made?
Cancellation of the offer will be permitted until the last day of the issuance period.

How will the SGB guarantee be made available to investors?
Participants can choose between deposit mode and physical mode to place the bid on behalf of their investors. In case of deposit mode, the RBI will credit the gold bonds in the demat account of the client. In case of physical mode, the RBI will issue a physical gold bond certificate to the clients.

The term of a government bond is eight years. Investors who bought government bonds earlier may find that they cannot hold the bonds for the full eight-year period. These people use the stock market to sell the assets they own (much like they do with stocks).