RBI announces early redemption of 2017 and 2019 SGB tranches on June 11; price fixed at ₹9,646

The Reserve Bank of India (RBI) has announced the redemption price for two tranches of Sovereign Gold Bonds (SGB), originally issued on December 11, 2017, and June 11, 2019, eligible for premature redemption on June 11, 2025.

According to government guidelines, premature redemption of SGBs is permitted after the fifth year from the issue date, provided it occurs on an interest payment date. Accordingly, June 11 marks the window for eligible investors of SGB 2017-18 Series XI and SGB 2019-20 Series I.

The redemption price has been fixed at ₹9,646 per unit, based on the simple average of closing prices of gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) on June 6, June 9, and June 10, 2025.

Each SGB unit represents one gram of gold. Thus, investors opting for early redemption will receive ₹9,646 for every gram held under these specific bond series.

Tax benefits and rules

While interest earned on SGBs is taxable under the Income Tax Act, capital gains on redemption are exempt for individuals. For others, any long-term capital gains from the transfer of bonds in the secondary market are subject to indexation benefits, making SGBs a tax-efficient investment for those holding them until redemption.

Redemption procedure

Under the scheme rules, bonds mature after eight years but can be redeemed after five years on interest payout dates. The RBI or depository notifies investors about maturity or redemption a month in advance. Redemption proceeds are paid in Indian rupees based on the average gold prices over the three working days before the redemption date.

Investors who miss the June 11 window will have to wait for the next interest payout date to redeem their bonds prematurely or hold them until full maturity in 2025 (for the 2017 tranche) or 2027 (for the 2019 tranche).

This redemption option offers an attractive exit for investors looking to capitalise on high gold prices while enjoying favourable tax treatment.