The Reserve Bank of India (RBI) has fixed the premature redemption price of Sovereign Gold Bond (SGB) 2019-20 Series VI at ₹14,213 per unit, giving investors an opportunity to exit the gold-linked investment on October 30, 2026. The tranche was originally issued on October 30, 2019, at ₹3,835 per gram, with an online subscription discount of ₹50 bringing the effective purchase price to ₹3,785 per gram.
At the online issue price, an investment of ₹1 lakh has grown to approximately ₹3.76 lakh, excluding interest and taxes. This represents an absolute price return of 275.51%. Investors also received fixed interest of 2.5% annually on their original investment, paid separately. However, the revised tax rules effective from April 1, 2026, mean that premature SGB redemption is no longer eligible for the capital gains exemption, even for investors who subscribed during the original issue.
Key Takeaways
- RBI fixed the premature redemption price of SGB 2019-20 Series VI at ₹14,213 per gram.
- The redemption date is October 30, 2026.
- The original online issue price was ₹3,785 per gram after a ₹50 discount.
- The bond has delivered a 275.51% absolute price return, excluding interest and taxes.
- A ₹1 lakh online investment has grown to approximately ₹3.76 lakh before interest and taxes.
- Investors received an additional 2.5% annual interest on the initial investment.
- Under tax rules effective from April 1, 2026, premature redemption gains are taxable.
RBI Fixes SGB 2019-20 Series VI Redemption Price at ₹14,213
The RBI announced that investors holding SGB 2019-20 Series VI could opt for premature redemption on October 30, 2026. It fixed the redemption price at ₹14,213 per unit.
The price is based on the simple average of the closing prices of 999-purity gold for the three preceding business days: October 27, October 28 and October 29, 2026. The gold prices published by the India Bullion and Jewellers Association (IBJA) are used for this calculation.
Sovereign Gold Bonds are government securities denominated in grams of gold. They are issued by the RBI on behalf of the Government of India and allow investors to benefit from changes in gold prices without physically purchasing or storing the metal.
The 2019-20 Series VI tranche was issued on October 30, 2019. Under the scheme, investors can request premature redemption after completing five years from the issue date, but only on designated interest payment dates.
How Much Has a ₹1 Lakh SGB Investment Grown?
The original issue price for SGB 2019-20 Series VI was ₹3,835 per gram. Investors who applied online and paid digitally received a discount of ₹50 per gram, reducing the effective purchase price to ₹3,785.
With the redemption price now at ₹14,213, the investment has recorded a substantial increase in value.
| Particulars | Amount |
|---|---|
| Original offline issue price | ₹3,835 per gram |
| Original online issue price | ₹3,785 per gram |
| Premature redemption price | ₹14,213 per gram |
| Absolute gain per gram for online investors | ₹10,428 |
| Absolute price return | 275.51% |
| Initial investment used in example | ₹1,00,000 |
| Redemption value | Approximately ₹3,75,508 |
| Total price gain | Approximately ₹2,75,508 |
For an investor who purchased the bonds online, ₹1 lakh would have bought approximately 26.42 grams of gold-linked bonds. At the redemption price of ₹14,213 per gram, those units would now be worth approximately ₹3.76 lakh.
This calculation excludes interest income and taxes. Actual proceeds may vary depending on the original purchase price and the number of units held.
SGB Returns: How the 275.51% Gain Is Calculated
The price return is calculated by comparing the original online issue price with the current redemption price.
| Calculation | Value |
|---|---|
| Redemption price | ₹14,213 |
| Original online issue price | ₹3,785 |
| Gain per gram | ₹10,428 |
| Percentage gain | 275.51% |
The formula is:
Return = (Redemption Price − Issue Price) ÷ Issue Price × 100
Using the figures:
(₹14,213 − ₹3,785) ÷ ₹3,785 × 100 = 275.51%
This is an absolute return over approximately seven years, not an annualised return. It also does not include the additional interest received during the holding period.
Investors Also Earned 2.5% Annual Interest
One of the distinctive features of Sovereign Gold Bonds is that investors receive fixed interest in addition to any increase in the value of gold.
SGB 2019-20 Series VI carries an interest rate of 2.5% per annum on the original investment amount. Interest is paid half-yearly and is calculated on the initial nominal value rather than the changing market value of the bond.
For an original investment of ₹1 lakh, the annual interest works out to ₹2,500 before tax.
| Particulars | Amount |
|---|---|
| Original investment | ₹1,00,000 |
| Annual interest rate | 2.5% |
| Annual interest | ₹2,500 |
| Half-yearly interest | ₹1,250 |
The interest is separate from the redemption proceeds. Therefore, the actual overall return for an investor includes both the increase in the bond’s redemption value and the interest received over the holding period.
Interest income from SGBs is taxable according to the investor’s applicable income-tax provisions.
New SGB Tax Rules: Why Premature Redemption Is Taxable
Investors should pay particular attention to the tax changes introduced from April 1, 2026.
Previously, capital gains arising from redemption of Sovereign Gold Bonds with the RBI were exempt under the applicable provisions, subject to the earlier rules.
The Income-tax Act, 2025 has narrowed this exemption. Under the revised provisions, the capital gains exemption is available only when an individual:
- Subscribed to the SGB at the time of its original issue.
- Held the bond continuously until its scheduled eight-year maturity.
The exemption does not apply to premature redemption, even when the investor originally subscribed to the bond directly from the RBI.
It also does not apply to bonds purchased through the secondary market.
| Investor situation | Capital gains exemption under revised rules |
|---|---|
| Original subscriber holds bond until eight-year maturity | Eligible, subject to conditions |
| Original subscriber opts for premature redemption | Not eligible |
| Investor purchases SGB through stock exchange and holds until maturity | Not eligible |
| Investor purchases SGB through stock exchange and redeems prematurely | Not eligible |
This means investors redeeming SGB 2019-20 Series VI on October 30, 2026, should account for applicable capital gains tax.
The exact tax liability depends on the investor’s acquisition details and applicable tax provisions. Investors should consult a tax professional before calculating their final post-tax return.
How Is the SGB Premature Redemption Processed?
Sovereign Gold Bonds have an original maturity period of eight years. However, investors are allowed to exit early after completing five years from the issue date, on specified interest payment dates.
For SGB 2019-20 Series VI, the premature redemption date was October 30, 2026.
Investors generally need to submit their redemption requests through the bank, post office or other intermediary through which the bonds are held. Those holding bonds in dematerialised form should follow the process communicated by their depository participant or broker.
The redemption price is determined by the RBI using the average closing price of 999-purity gold over the three preceding business days, as published by IBJA.
Investors should also verify that their redemption request was submitted within the prescribed window. The redemption date and request submission deadline are not necessarily the same.
What Are Sovereign Gold Bonds?
Sovereign Gold Bonds are government securities issued by the RBI on behalf of the Government of India. Their value is linked to the price of gold, with each unit representing one gram of the precious metal.
They were introduced as an alternative to holding physical gold. Investors receive returns linked to gold prices and a fixed annual interest payment.
The main features include:
| Feature | Details |
|---|---|
| Issuer | Government of India |
| Issuing institution | Reserve Bank of India |
| Denomination | Grams of gold |
| Standard maturity | Eight years |
| Premature redemption | Permitted after five years on designated interest payment dates |
| Interest rate for this tranche | 2.5% per annum |
| Redemption price | Linked to the average closing price of 999-purity gold |
| Interest payment | Half-yearly |
SGBs also eliminate the need for investors to arrange physical storage and deal with concerns such as purity and making charges associated with jewellery purchases.
However, their market value remains linked to gold prices, and investors can experience losses if gold prices decline relative to their purchase price.
The Bigger Picture
The redemption of SGB 2019-20 Series VI highlights the substantial gains that investors who entered the gold market in 2019 have received as gold prices increased. The bond’s redemption price has risen from an online issue price of ₹3,785 to ₹14,213 per gram, delivering a price gain of more than 275%, apart from the interest paid during the holding period.
However, the tax treatment has changed significantly. Investors can no longer assume that redemption gains are tax-free simply because they purchased SGBs directly from the RBI. The revised rules distinguish between premature redemption and holding the bond continuously until its scheduled maturity.
Looking Ahead
Investors holding other SGB tranches should check their issue dates, premature redemption schedules and applicable tax rules before deciding when to exit. The RBI calculates each tranche’s redemption price separately using the gold prices immediately preceding its designated redemption date.
For investors considering future gold-linked investments, the SGB experience demonstrates the importance of evaluating both gold-price movements and tax treatment. The final return depends not only on the redemption value but also on interest received, the purchase price, holding period and taxes.
Frequently Asked Questions
1. What is the SGB 2019-20 Series VI redemption price?
The RBI has fixed the premature redemption price at ₹14,213 per gram for October 30, 2026.
2. How much has a ₹1 lakh investment in this SGB grown?
An online investment of ₹1 lakh made at ₹3,785 per gram has grown to approximately ₹3.76 lakh, excluding interest and taxes.
3. What was the original issue price of SGB 2019-20 Series VI?
The original issue price was ₹3,835 per gram. Investors who applied online and paid digitally received a ₹50 discount, bringing the effective price to ₹3,785 per gram.
4. How much interest do SGB 2019-20 Series VI investors receive?
The bond pays fixed interest of 2.5% per annum on the original investment amount. Interest is paid half-yearly.
5. How is the SGB redemption price calculated?
The RBI calculates the premature redemption price using the simple average of the closing prices of 999-purity gold for the three preceding business days, as published by IBJA.
6. Is premature SGB redemption tax-free in 2026?
No. Under the revised tax provisions effective from April 1, 2026, the capital gains exemption applies only to eligible original subscribers who hold their bonds continuously until the eight-year maturity. Premature redemption is taxable.
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