The Reserve Bank of India (RBI) has announced the premature redemption price of the Sovereign Gold Bond scheme SGB 2020-21 Series-III due on June 16, 2026.
Investors in the Sovereign Gold Bond scheme SGB 2021-22 Series-II-Issue stand to gain 219% over the 5 years. The investors end up gaining an annualized return of 26% in this series of SGBs. There was an additional return of 2.5%, half-yearly paid to the SGB investors.
The price for premature redemption due on June 16, 2026, is fixed at Rs 14,774 per unit of SGB based on the simple average of the closing price of gold for the three business days i.e., June 11, June 12, and June 15, 2026.
The redemption price is calculated under RBI rules. For this, the average price of 999 purity gold of the last three business days published by the India Bullion and Jewelers Association (IBJA) is taken.
The subscription dates for this series were June 08-12, 2020, and the bond was issued on June 16, 2020. At that time, the price of these bonds was fixed at Rs 4,677 per gram, while for online buyers, the price per ten grams was Rs 4,627 after a discount of Rs 50.
SGBs have an eight-year duration, but investors may redeem them before the fifth year. Sovereign Gold Bond Scheme, premature redemption of Gold Bond is permitted after the fifth year from the date of issue of such Gold Bond, on the date on which interest is payable.
SGB Taxation
A big change has been introduced in the taxation of SGBs in Budget 2026. The capital gains from gold bonds will be exempt from tax if the bond was purchased during primary issuance and held for a full 8 years until maturity. Premature withdrawal through the RBI does not qualify for this exemption.
Capital gains from SGBs will be taxable if they are bought in the secondary market, sold in the secondary market, or redeemed during a premature withdrawal window, regardless of the original purchase method.
Disclaimer: This article is intended for general awareness only and should not be construed as tax or investment advice. Tax treatment of SGB gains may vary based on individual circumstances and is subject to change. Readers are advised to consult a SEBI-registered investment advisor or qualified tax professional before making any redemption or investment decisions. Financial Express is not responsible for any decisions made based on this information.
