The Reserve Bank of India (RBI) has announced the redemption price for the Sovereign Gold Bond (SGB) 2019-20 Series-VI, as the next premature redemption window approaches. Eligible investors can redeem their holdings on October 30, 2025, marking five years since the bond’s issue date of October 30, 2019.
Premature Redemption After Five Years
As per 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 an interest payment date. For the Series-VI tranche, this redemption opportunity falls on October 30, 2025, and the redemption proceeds will be directly credited to the investors’ registered bank accounts.
How the Redemption Price Is Calculated
The redemption price of SGBs 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. This was calculated using the average gold prices on October 27, 28, and 29, 2025.
Over 213% Returns for Investors
Investors who subscribed to the Series-VI bonds at the issue price of ₹3,788 per gram in October 2019 will receive ₹11,992 per gram upon redemption. This represents an impressive capital appreciation of nearly 213% over six years, excluding the fixed annual interest earned during the period.
About the Sovereign Gold Bond Scheme
Launched by the Government of India in November 2015, the Sovereign Gold Bond (SGB) Scheme offers investors an alternative to owning physical gold. The bonds, issued by the RBI on behalf of the Centre, are denominated in grams of gold and provide a 2.5% fixed annual interest on the issue price, along with returns linked to gold prices.
The scheme aims to reduce India’s dependence on physical gold imports, discourage hoarding, and promote financial savings. Each bond has a tenure of eight years, with an option for premature redemption after five years on interest payment dates. SGBs can also be traded on stock exchanges, transferred, or used as collateral for loans.
Tax Treatment
Under the Income-tax Act, 1961, the interest earned on SGBs is taxable. However, capital gains on redemption (after maturity or premature exit through RBI) are exempt from tax. If the bonds are sold on the exchange, investors can avail indexation benefits on the capital gains.
