The Reserve Bank of India (RBI) has announced the premature redemption price of the Sovereign Gold Bond scheme SGB 2019-20 Series-VIII due on July 21, 2026.SGBs have an eight-year duration, but investors may redeem them before the fifth year. However, 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.

The next due date of premature redemption of the above tranche will be on July 21, 2026. Accordingly, the redemption price for premature redemption due on July 21, 2026, shall be Rs 14,170 per unit of SGB based on the simple average of the closing price of gold for the three business days i.e., July 16, July 17, and July 20, 2026.

Sovereign Gold Bonds SGB 2019-20 Series-VIII was open between January 13-17, 2020, with the settlement date January 21, 2020. The issue price of the Bond during the subscription period was Rs 4,016 per gram and Rs 3,966 for the digital purchase, after a discount of Rs 50.

The redemption price of SGB is based on the simple average of the closing price of gold of 999 purity of the previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).

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Returns for Gold Bond investors

Investors in the Sovereign Gold Bond (SGB) scheme SGB 2019-20 Series-VIII due on July 21 are expected to gain 257% over six years and six months, equating to an annualized return of over 21%. There was an additional return of 2.5%, half-yearly paid to the SGB investors.

Gold price in India is Rs 14,247 per gram as of July 20, having gained Rs 110 per gram over the previous day’s close.

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.