The Sovereign Gold Bonds 2016-17-Series IV issued by the government of India was opened to investors on Monday February 27 and applications will be accepted till March 3, the Finance Ministry has announced. The bonds will be issued to all eligible applicants on March 17, 2017, it added.

This is the fourth and last tranche of the current fiscal, the government said and the seventh tranche overall in the SGB scheme which commenced in November 2015. The scheme aims to encourage investors to purchase the yellow metal without having to hold it in physical form.

The bonds, issued by the Reserve Bank of India on behalf of the government, will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges, NSE and BSE.

The minimum investment size will be 1 gm and the maximum should not exceed 500 grams per person per fiscal year as per the rules of the scheme.

The ministry said that the bondholders will receive a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value of investment. The tenor of the bonds will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.

Payment for the bonds will be through cash payment (up to a maximum of Rs 20,000) or demand draft or cheque or electronic banking.

The government said that it had mobilised Rs 3,060 crore from five earlier tranches.

Income from redemption of the bonds has been exempted from capital gains tax. The indexation benefits will be provided to long-term capital gains arising to any person on transfer of bond.