The bond was issued at ₹4,589 per unit on April 28, 2020. The redemption price for premature redemption stands at ₹9,600 per unit.
The redemption price is based on the simple average of closing gold prices of 999 purity for the past three business days — April 23, April 24, and April 25, 2025 — as published by the India Bullion and Jewellers Association (IBJA).
The SGB scheme permits premature redemption after completing five years from the issue date, only on interest payment dates.
The gain is purely on the price, excluding any interest income. Investors have separately earned 2.5% annual interest on the initial investment, paid semi-annually.
Capital gains on redemption of SGBs are tax-free. However, the interest income is taxable as per the investor’s applicable income tax slab.
About SGBs
SGBs are government-backed bonds offering returns linked to the price of gold.
Amid the continuous rise in domestic gold prices, the government in Union Budget 2025 discontinued fresh issuances of the Sovereign Gold Bond scheme.
However, existing bonds remain active and will be redeemed on schedule or on eligible early redemption dates.
What if you miss the SGB premature exit window?
Missing the early redemption window does not result in a loss of investment. The bond will continue to earn the fixed 2.5% interest annually until the 8-year maturity. Alternatively, investors may sell the bonds in the secondary market at prevailing market prices.
