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Sovereign Gold Bonds: The redemption has been permitted today, September 11, and the price has been fixed at Rs 10,905 per unit, a 155.99% gain over the issue price of Rs 4,260.
As per the SGB scheme, the gold bonds shall be repayable on the expiration of eight years from the date of the issue of the bonds.
Days after the SGB 2020-21 Series VI, the Reserve Bank of India (RBI) has announced the premature redemption of Sovereign Gold Bonds (SGBs) under the 2019-20 Series X, issued on March 11, 2020.
The redemption has been permitted today, September 11, 2025, and the price has been fixed at Rs 10,905 per unit, which is a 155.99% gain over the issue price of Rs 4,260. This does not include the interest income earned during the holding period.
“The due date of premature redemption of the (SGB 2019-20 Series-X – Issue date March 11, 2020) tranche shall be on September 11, 2025,” the RBI said in a statement on Wednesday, September 10.
The redemption price has been calculated on the basis of the simple average of closing gold prices published by the India Bullion and Jewellers Association (IBJA) for the three business days — September 8, 9, and 10, 2025.
According to the SGB scheme, the gold bonds shall be repayable on the expiration of eight years from the date of the issue of the bonds. However, premature redemption of the bonds may be permitted after the fifth year from the date of issue of bonds and such repayments will be made on the next interest payment date.
Tax Treatment of Sovereign Gold Bonds
The interest on the SGBs is taxable as per the provisions of the Income-tax Act, 1961 (Section 43 of 1961). The capital gains tax arising on redemption of these bonds to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on the transfer of the bonds.
Interest Rate On SGBs
Interest on the gold bonds, at an annual fixed rate of 2.5%, is credited semi-annually to the bank account of the investors.
What is The Sovereign Gold Bonds Scheme?
The Sovereign Gold Bond (SGB) Scheme was launched by the Government of India in November 2015 as an alternative to owning physical gold. Issued by the Reserve Bank of India (RBI) on behalf of the Centre, these bonds were denominated in grams of gold and offered investors the dual benefit of earning a fixed annual interest (2.5% on the issue price) along with capital appreciation linked to gold prices. The scheme aimed to reduce India’s dependence on imported physical gold, curb hoarding, and channel household savings into financial assets.
Why Was This Scheme Discontinued?
The government discontinued fresh issuances of SGBs in October 2023, citing that the scheme had largely achieved its objectives and that the cost of managing and servicing the bonds had grown significantly. Another key factor was the availability of other gold investment avenues such as Gold ETFs and digital gold, which reduced the need for periodic SGB issuances. However, existing bonds remain valid, and investors can hold them until maturity or opt for premature redemption as per the scheme’s rules.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
September 11, 2025, 12:20 IST
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