The Reserve Bank of India (RBI) has announced the premature redemption prices of the Sovereign Gold Bond scheme SGB 2019-20 Series IX and SGB 2020-21 Series V due on August 11, 2026.
Sovereign Gold Bonds SGB 2019-20 Series IX was open between February 03-07, 2020 with Settlement date February 11, 2020. The issue price of the Bond during the subscription period was Rs 4,070 per gram and Rs 4,020 for the digital purchase, after a discount of Rs 50.
Sovereign Gold Bonds SGB 2020-21 Series V was open between August 3 to August 7, 2020 with Settlement date August 11, 2020. The issue price of the Bond during the subscription period was Rs 5,334 per gram and Rs 5,284 for the digital purchase, after a discount of Rs 50.
The redemption price of SGB is based on simple average of closing price of gold of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).
SGBs have an eight-year duration, but investors may redeem them after the fifth year as premature redemption of Gold Bond is permitted after 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 August 11, 2026.
According to RBI, the redemption price for premature redemption of SGB 2019-20 Series IX due on August 11, will be Rs 14,957 per unit of SGB based on the simple average of closing price of gold for the three business days i.e., August 06, August 07, and August 10, 2026.
And, the redemption price for premature redemption of SGB 2020-21 Series V due on August 11, will also be Rs 14,957 per unit of SGB based on the simple average of closing price of gold for the three business days i.e., August 06, August 07, and August 10, 2026.
Returns for Gold Bond investors
Investors in the Sovereign Gold Bond (SGB) scheme SGB 2019-20 Series IX due on August 11 are expected to gain 272% over six years and six months, equating to an annualized return of over 22%. There was an additional return of 2.5%, half-yearly paid to the SGB investors.
Investors in the Sovereign Gold Bond (SGB) scheme SGB 2020-21 Series V due on August 11 are expected to gain 183% over six years, equating to an annualized return of nearly 19%. There was an additional return of 2.5%, half-yearly paid to the SGB investors.
Gold price in India is Rs 15,214 per gram as of August 10, 2026.
Taxation of Sovereign Gold Bond
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.