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SGB Redemption: The Reserve Bank of India (RBI) has fixed the premature redemption price for the SGB Series-VI (2019-20) at Rs 11,992 per unit compared to the issue price at Rs 3,788 per unit in October 2019, reflecting a gain of 213 per cent to investors. The redemption price is determined based on the simple average of the closing prices of gold (999 purity) published by the India Bullion and Jewellers Association Ltd (IBJA) for the three business days preceding the redemption date. SGB Series-VI tranche is available for premature redemption from today, September 30, 2025. According to the SGB scheme, the gold bonds will 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 On SGB 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 on the gold bonds, at an annual fixed rate of 2.5%, is credited semi-annually to the bank account of the investors. The Sovereign Gold Bond (SGB) Scheme, launched by the Government of India in November 2015, was introduced as an alternative to buying physical gold. Issued by the Reserve Bank of India (RBI) on behalf of the Centre, these bonds are linked to the price of gold and denominated in grams. Investors earn a fixed annual interest of 2.5% on the issue price, along with potential capital gains from rising gold prices. The scheme aims to reduce India’s reliance on imported gold, discourage hoarding, and encourage households to invest in financial assets instead.
