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Consider the following statements regarding Sovereign Gold Bond Scheme.
- Bonds can be used as collateral for loans.
- The maximum permissible investment limit will be 10 kg of gold for individual.
- Both resident and non-resident Indian entities can invest in Sovereign Gold Bond Scheme.
Which of the above statements is/are correct?
- a)2, 3
- b)1, 2
- c)1 only
- d)1, 2, 3
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding Sovereign Gold Bond Scheme...
The sovereign gold bond was introduced by the Government in 2015.
Government introduced these bonds to help reduce India’s over dependence on gold imports.
It was also aimed at changing the habits of Indians from saving in physical form of gold to a paper form with Sovereign backing.
Government introduced these bonds to help reduce India’s over dependence on gold imports.
It was also aimed at changing the habits of Indians from saving in physical form of gold to a paper form with Sovereign backing.
Key facts:
- Eligibility: The bonds will be restricted for sale to resident Indian entities, including individuals, HUFs, trusts, universities and charitable institutions.
- Denomination and tenor: The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor will be for a period of 8 years with exit option from the 5th year to be exercised on the interest payment dates.
- Minimum and Maximum limit: The minimum permissible investment limit will be 1 gram of gold, while the maximum limit will be 4 kg for individual, 4 kg for Hindu Undivided Family and 20 kg for trusts and similar entities per fiscal (April-March) notified by the government from time to time.
- Joint Holder: In case of joint holding, the investment limit of 4 kg will be applied to the first applicant only.
- Collateral: Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
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Community Answer
Consider the following statements regarding Sovereign Gold Bond Scheme...
Statement 1: Bonds can be used as collateral for loans.
This statement is correct. Under the Sovereign Gold Bond Scheme, the bonds can be used as collateral for loans. This means that individuals who hold these bonds can use them as security to avail loans from banks or other financial institutions.
Statement 2: The maximum permissible investment limit will be 10 kg of gold for individuals.
This statement is incorrect. The maximum permissible investment limit for individuals under the Sovereign Gold Bond Scheme is 4 kg per fiscal year (April-March). This limit applies to both resident and non-resident Indian individuals.
Statement 3: Both resident and non-resident Indian entities can invest in the Sovereign Gold Bond Scheme.
This statement is correct. Both resident and non-resident Indian entities are eligible to invest in the Sovereign Gold Bond Scheme. This includes individuals, HUFs (Hindu Undivided Families), trusts, universities, and charitable institutions.
Explanation:
The Sovereign Gold Bond Scheme was launched by the Government of India in November 2015 to provide an alternative investment option for individuals and entities who are interested in investing in gold. The scheme aims to reduce the demand for physical gold and shift a part of the domestic savings into financial savings.
Under the scheme, the government issues bonds denominated in grams of gold. These bonds are issued in tranches periodically and can be purchased by individuals and entities through banks, designated post offices, and other authorized agencies. The bonds have a tenure of 8 years, with an exit option available after the 5th year.
One of the advantages of investing in sovereign gold bonds is that they offer an annual interest rate, which is currently set at 2.50% per annum. The interest is credited semi-annually to the investor's bank account. Additionally, the capital gains arising from the redemption of these bonds are exempted from income tax.
In conclusion, the correct statements regarding the Sovereign Gold Bond Scheme are that bonds can be used as collateral for loans and both resident and non-resident Indian entities can invest in the scheme. The maximum permissible investment limit for individuals, however, is 4 kg of gold per fiscal year, not 10 kg.
This statement is correct. Under the Sovereign Gold Bond Scheme, the bonds can be used as collateral for loans. This means that individuals who hold these bonds can use them as security to avail loans from banks or other financial institutions.
Statement 2: The maximum permissible investment limit will be 10 kg of gold for individuals.
This statement is incorrect. The maximum permissible investment limit for individuals under the Sovereign Gold Bond Scheme is 4 kg per fiscal year (April-March). This limit applies to both resident and non-resident Indian individuals.
Statement 3: Both resident and non-resident Indian entities can invest in the Sovereign Gold Bond Scheme.
This statement is correct. Both resident and non-resident Indian entities are eligible to invest in the Sovereign Gold Bond Scheme. This includes individuals, HUFs (Hindu Undivided Families), trusts, universities, and charitable institutions.
Explanation:
The Sovereign Gold Bond Scheme was launched by the Government of India in November 2015 to provide an alternative investment option for individuals and entities who are interested in investing in gold. The scheme aims to reduce the demand for physical gold and shift a part of the domestic savings into financial savings.
Under the scheme, the government issues bonds denominated in grams of gold. These bonds are issued in tranches periodically and can be purchased by individuals and entities through banks, designated post offices, and other authorized agencies. The bonds have a tenure of 8 years, with an exit option available after the 5th year.
One of the advantages of investing in sovereign gold bonds is that they offer an annual interest rate, which is currently set at 2.50% per annum. The interest is credited semi-annually to the investor's bank account. Additionally, the capital gains arising from the redemption of these bonds are exempted from income tax.
In conclusion, the correct statements regarding the Sovereign Gold Bond Scheme are that bonds can be used as collateral for loans and both resident and non-resident Indian entities can invest in the scheme. The maximum permissible investment limit for individuals, however, is 4 kg of gold per fiscal year, not 10 kg.
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Consider the following statements regarding Sovereign Gold Bond Scheme. Bonds can be used as collateral for loans. The maximum permissible investment limit will be 10 kg of gold for individual. Both resident and non-resident Indian entities can invest in Sovereign Gold Bond Scheme.Which of the above statements is/are correct?a)2, 3b)1, 2c)1 onlyd)1, 2, 3Correct answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Sovereign Gold Bond Scheme. Bonds can be used as collateral for loans. The maximum permissible investment limit will be 10 kg of gold for individual. Both resident and non-resident Indian entities can invest in Sovereign Gold Bond Scheme.Which of the above statements is/are correct?a)2, 3b)1, 2c)1 onlyd)1, 2, 3Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Sovereign Gold Bond Scheme. Bonds can be used as collateral for loans. The maximum permissible investment limit will be 10 kg of gold for individual. Both resident and non-resident Indian entities can invest in Sovereign Gold Bond Scheme.Which of the above statements is/are correct?a)2, 3b)1, 2c)1 onlyd)1, 2, 3Correct answer is option 'C'. Can you explain this answer?.
Consider the following statements regarding Sovereign Gold Bond Scheme. Bonds can be used as collateral for loans. The maximum permissible investment limit will be 10 kg of gold for individual. Both resident and non-resident Indian entities can invest in Sovereign Gold Bond Scheme.Which of the above statements is/are correct?a)2, 3b)1, 2c)1 onlyd)1, 2, 3Correct answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Sovereign Gold Bond Scheme. Bonds can be used as collateral for loans. The maximum permissible investment limit will be 10 kg of gold for individual. Both resident and non-resident Indian entities can invest in Sovereign Gold Bond Scheme.Which of the above statements is/are correct?a)2, 3b)1, 2c)1 onlyd)1, 2, 3Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Sovereign Gold Bond Scheme. Bonds can be used as collateral for loans. The maximum permissible investment limit will be 10 kg of gold for individual. Both resident and non-resident Indian entities can invest in Sovereign Gold Bond Scheme.Which of the above statements is/are correct?a)2, 3b)1, 2c)1 onlyd)1, 2, 3Correct answer is option 'C'. Can you explain this answer?.
Solutions for Consider the following statements regarding Sovereign Gold Bond Scheme. Bonds can be used as collateral for loans. The maximum permissible investment limit will be 10 kg of gold for individual. Both resident and non-resident Indian entities can invest in Sovereign Gold Bond Scheme.Which of the above statements is/are correct?a)2, 3b)1, 2c)1 onlyd)1, 2, 3Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
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