On 20th April 2026, RBI (Reserve Bank of India) announced early redemption of SGB (Sovereign Gold Bond) 2020-21 Series-VII for investors according to the notification from the central bank.
SGB scheme (Sovereign Gold Bond) scheme comes under government rules where "premature redemption of gold bonds might be permitted after the fifth year from the date of issue. Interest rates are also applicable for SGB.
What are (SGB) Sovereign Gold Bonds?
SGBs are backed by government securities denominated in grams of gold and were launched to offer an alternative option to physical gold. They also provide exposure to gold prices without purity concerns. Investors get both principal and interest rate guarantees once they invest in SGB gold bonds. Also, the interest income is taxable according to the income slab of the investor.
How Much Will Investors Gain Profits From SGB?
Investors can choose a gold bond stand to gain over 204% increase at Rs 15,254/unit, against the purchase price of 5,051 per unit. There was also a Rs 50 discount on the date of issuance for those who purchased the bond online, which has increased their margin gain to 205%. Also, investors earn an interest rate of 2.5% annually for the holding period.
Do You Have To Pay Income Tax For Earnings From Sovereign Gold Bonds?
After 1st April 2026, the SGB will be taxable, which means that investors will have to pay capital gains on redemption, and are exempt only for original subscribers who hold the SGB till maturity. Gains from Sovereign Gold Bonds, if you held for more than a year, would be 12.5%. Interest earned on the SGBs is also taxable, and if you purchase SGBs from the secondary market, then they are not eligible for capital gains tax on redemption.
|