The Reserve Bank of India (RBI) has announced the premature redemption price for the Sovereign Gold Bond scheme SGB 2018-19 Series-IV, which matures on July 01, 2026. Investors of SGB 2018-19 Series-IV can expect a gain of 359% over the five years, if they wish to redeem now. The investors will end up gaining an annualized return of 35% in this series of SGBs. There was an additional return of 2.5%, paid half-yearly to SGB investors.

In Sovereign Gold Bond Scheme, premature redemption of the Gold Bond may be permitted after the fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the next due date of premature redemption of the above tranche is July 01, 2026.

The price for premature redemption due on July 01, 2026, is fixed at Rs 14,086 per unit of SGB based on the simple average of the closing price of gold for the three business days i.e., June 25, June 29, and June 30, 2026.

The redemption price is calculated under RBI rules. For this, the average price of 999 purity gold over the last three business days, as published by the India Bullion and Jewelers Association (IBJA), is used.

The subscription dates for this series were December 24-28, 2018, and the bond was issued on January 01, 2019. At that time, the price of these bonds was fixed at Rs 3,119 per gram, while for online buyers, the price per ten grams was Rs 3,069 after a discount of Rs 50.

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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.

As of June 30, the gold price in India is approximately Rs 14,254 for ten grams of 24-carat gold.

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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.