Premature redemption is permitted for SGB 2019-20 Series V on October 15, 2026, after completion of five years. Redemption price based on simple average of weekly gold prices.
Premature Redemption of Sovereign Gold Bonds
As per Government of India notification F.No. 4(7)-B(W&M)/2019 dated September 30, 2019, holders of Sovereign Gold Bonds (SGB) 2019-20 Series V, issued on October 15, 2019, are eligible for premature redemption on October 15, 2026. This date marks the end of the fifth year from issuance, which is the earliest permitted date for early redemption, coinciding with the interest payment date.
The redemption price will be determined based on the simple average of the closing gold prices for the preceding week, as published by the RBI. Investors may submit requests through authorized banks, post offices, or stock exchanges, as per operational guidelines issued by the government and RBI.
Implication for practitioners: Advisors should note that premature redemption is not automatic and requires action by investors. While capital gains tax implications on redemption apply, indexation benefits under Section 48 of the Income Tax Act may be available for long-term holdings.
