The government has set the premature redemption price at ₹15,814 per unit, calculated as the simple average of the closing price of 999 purity gold over the previous three business days—March 12, March 13 and March 16, 2026—as published by the India Bullion and Jewellers Association (IBJA).
The SGB 2019–20 Series IV was originally issued on September 17, 2019, at ₹3,890 per gram, with a discounted price of ₹3,840 per gram for online subscribers. Based on the issue price, the current redemption level implies gains of over three times the initial investment for investors choosing early exit.
Under scheme rules notified by the government, premature redemption is permitted after the fifth year from the date of issue, on interest payment dates. Accordingly, March 17, 2026, marks the next eligible date for early redemption of this tranche.
Apart from the capital gains from rising gold prices, SGB holders also earn a fixed interest of 2.5% per annum, paid semi-annually on the initial investment amount. This means the overall returns for investors would be higher when the cumulative interest payouts over the holding period are included.
Sovereign Gold Bonds carry a maturity period of eight years, though investors are allowed to exit early starting from the fifth year on designated dates. The scheme is aimed at offering investors exposure to gold prices in a financial form while reducing demand for physical gold.
The Union Budget 2026 proposed changes to the tax treatment of SGBs, introducing a distinction between primary subscribers and secondary-market buyers.
From April 1, 2026, the long-standing capital gains tax exemption on SGBs redeemed at maturity will be available only to investors who subscribe directly at the RBI’s primary issuance and hold the bonds till maturity. Investors who purchase SGBs from exchanges or other holders in the secondary market will not get tax-free redemption, even if they hold the bonds to maturity.
