As you may know that SGBs or Sovereign Gold Bond are government securities denominated in grams of gold and as per RBI's saying These are the substitutes for holding physical gold where a semi-annual interest is provided till the maturity date. Now if you are not willing to receive the interest income till the maturity date or you have caught up with an emergency case and you are willing to sell your gold bonds immediately then you are at the right place because here we are going to learn about the concept of selling sovereign gold bonds in the secondary market.
Firstly you have to verfiy how you are holding your gold bonds. Gold bonds can be held in either Physical form or in Demat form. Let us consider you are holding the bonds in physical form then you have no other option except to hold the bonds for a minimum of 5 years. The bonds can be prematurely redeemed or enashed after the expirty of 5th year through banks at the price determined by the RBI through press release on the basis of IBJA Rates or if you are thinking to sell it before then you have to convert it into Demat form. Normally Demat form conversion can be done at Stock Holding Corporation of India or at your bank's branch or you can also fill a dematerialization request form with your stockbroker. Secondly, now let us consider you had given your Demat account number at the time of applying for the sovereign gold bond or you have just converted your physical gold bond certificate into Demat form, now you can easily sell it in the secondary market or you can also transfer your bonds in the name of a third person by using DIS Slips. If you are thinking to sell it in the secondary market then you have to check whether your stockbroker is allowing you to trade the SGBs or not. At the current time, only a few stockbrokers are allowing you to sell sovereign gold bonds in the secondary market for example Zerodha and Upstox are the major discount brokers in India who are allowing the retail investors to buy and sell sovereign gold bonds in the secondary market. Now suppose if your stockbroker is not allowing you to sell your gold bonds in the secondary market then you are left with these three options, first, you have to sell your gold bonds by using DIS slip to a known person or a person who is showing a willingness to buy, secondly, you have an option to approach your stock broker and ask him to place an order to sell the gold bonds in the secondary market and lastly, you have an option to open a new Demat account with brokers(Zerodha, Upstox) who are allowing you to sell and buy sovereign gold bonds in the secondary market and transfer your existing holding by using dis slip.
Things to consider before selling Sovereign Gold Bonds.
If you are planning to sell your sovereign gold bonds then you should know that you will not be eligible to receive the interest after your gold bonds are sold.
If you are selling your gold bonds in the secondary market or selling it to a third person then you are liable to pay tax on your capital gain.
Check whether the SGB is liquid or not. If the liquidity is less in the secondary market then you may face problems in selling.
for more details you can also watch this video(Hindi) https://youtu.be/cuS8G23EEzU
