New Delhi, August 14: Investors in the Sovereign Gold Bond (SGB) 2019-20 Series III can start receiving premature redemptions from Monday. The Reserve Bank of India (RBI) has set the redemption price at ₹15,310 per unit, which is nearly four times higher than the issue price of ₹3,449 per unit.
The SGB 2019-20 Series III was issued on August 14, 2019. Each unit of SGB is valued at approximately one gram of gold.
The redemption price is based on the simple average of the closing prices of 999-purity gold published by the India Bullion and Jewellers Association (IBJA) over the three business days preceding the redemption date. According to RBI’s SGB regulations, investors can redeem their bonds prematurely after five years from the date of issuance, specifically on the interest payment date.
The SGB scheme was launched in November 2015 by the central government in collaboration with the RBI, aiming to reduce the demand for physical gold in the country.
Experts consider the SGB to be one of the best gold investment schemes available. It offers an annual interest rate of 2.5% on the initial investment, separate from the increase in gold prices. This allows investors to achieve better returns compared to other gold schemes.
Additionally, capital gains from this scheme are tax-free. However, a significant change was recently introduced.
From April 1, 2026, the capital gains exemption on SGB redemptions will be limited. The Finance Bill 2026 states that this exemption applies only if an individual holds the SGB continuously from the original issue date until maturity. The government’s budget for 2026 also clarified that this exemption will not apply to premature redemptions after the stipulated five-year lock-in period.
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