RBI Announces Redemption Price for SGB 2019-20 Series VI: 213% Return in 6 Years

As investors prepare for the upcoming premature redemption opportunity of the Sovereign Gold Bond (SGB) 2019-20 Series VI, the Reserve Bank of India (RBI) has announced the redemption price for this tranche. Eligible bondholders can redeem their units on October 30, 2025, exactly 5 years after the original issue date of October 30, 2019.

Redemption After 5 Years

According to the Government of India’s notification dated September 30, 2019, premature redemption of SGBs is permitted after the fifth year from the date of issue, but only on designated interest payment dates. For the Series VI bonds, this redemption window opens on October 30, 2025. Investors opting for redemption will receive the proceeds directly in their registered bank accounts.

How the Redemption Price is Calculated

The redemption price is based on the simple average of closing gold prices (999 purity) published by the India Bullion and Jewellers Association Ltd (IBJA) for the three business days preceding the redemption date.

For the upcoming redemption on October 30, 2025, the RBI has fixed the redemption price at ₹11,992 per gram of SGB, calculated from the average gold prices on October 27, 28, and 29, 2025.

Investor Returns: Over 213% Gain in 6 Years

Investors who bought Series VI bonds at the issue price of ₹3,788 per gram in October 2019 stand to receive ₹11,992 per gram upon redemption in October 2025, resulting in a remarkable capital appreciation of nearly 213%.

Tax Treatment of Sovereign Gold Bonds

Under the Income-tax Act, 1961 (Section 43), the interest earned on SGBs is taxable. However, capital gains arising on redemption of these bonds are exempt from tax. Any capital gains from selling the bonds on the exchange are eligible for indexation benefits, making them a tax-efficient investment option.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.