Whalesbook
Redemption Price and Date Confirmed
The Reserve Bank of India has finalized the premature redemption price for the Sovereign Gold Bond (SGB) 2018-19 Series III at ₹15,102 per unit. This price is based on the simple average of gold's closing rates on May 8, 11, and 12, 2026, as reported by the India Bullion and Jewellers Association for 999 purity gold. Investors holding the bond can take advantage of the early exit option, available five years after issuance on an interest payment date, to realize significant returns by May 2026.
Investor Returns Reach 382%
Online investors who bought SGB 2018-19 Series III at ₹3,133 per gram are on track for an absolute return exceeding 382% by May 2026. A ₹1 lakh investment at issuance could grow to approximately ₹4.82 lakh upon this premature redemption, highlighting gold's investment potential.
New Capital Gains Tax Rules for Premature Redemptions
The attractive returns are accompanied by a key change: capital gains tax now applies to premature SGB redemptions. Since April 1, primary subscribers opting for early exit will be taxed on their profits. Only original subscribers who hold their bonds for the full eight-year term will still benefit from tax-free redemption at maturity. Investors who purchased SGBs on the secondary market also face taxation on redemption, regardless of their holding period. This tax update means investors should factor in the tax impact when calculating their net profits from early exits.