The Reserve Bank of India (RBI) has announced the premature redemption price for the Sovereign Gold Bond scheme: SGB 2020-21 Series X, due on July 18, 2026 (July 19 being a holiday), and SGB 2021-22 Series IV, due on July 20, 2026.
Sovereign Gold Bonds 2020-21 (Series X) were open between January 11 and 15, 2021, with the settlement date January 19, 2021. The issue price of the Bond during the subscription period was Rs 5,104 per gram and Rs 5,054 for the digital purchase.
Sovereign Gold Bonds 2021-22 Series IV was open between July 12 and 16, 2021, with the settlement date July 20, 2021. The issue price of the Bond during the subscription period was Rs 4,807 per gram and Rs 4,757 for the digital purchase.
The redemption price of SGB is based on the simple average of the closing price of 999 purity gold over the previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Accordingly, the redemption price for premature redemption due on July 18, 2026 (July 19 being a holiday) and July 20, 2026, shall be Rs 14,158 per unit of SGB based on the simple average of the closing price of gold for the three business days, i.e., July 15, July 16, and July 17, 2026.
Gold price in India is Rs 14,094 per gram as of July 17.
Returns for Gold Bond investors
Investors in the Sovereign Gold Bond (SGB) scheme SGB 2020-21 Series X due on July 18 are expected to gain 180% over five years and six months, equating to an annualized return of over 20%. There was an additional return of 2.5%, half-yearly paid to the SGB investors.
Investors in the Sovereign Gold Bond (SGB) scheme SGB 2021-22 Series IV due on July 20, 2026, are expected to gain 197% over five years, equating to an annualized return of 24%. There was an additional return of 2.5%, half-yearly paid to the SGB investors.
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.
