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Investors in Sovereign Gold Bond (SGB) 2019-20 Series V can use the RBI’s premature-redemption window on 15 October 2026, when the reported redemption price is ₹14,725 per gram. Mint’s comparison with the tranche’s original issue price implies an approximate 289%–294% price gain, before adding the bond’s 2.5% annual interest and before tax.
The gain is not automatically tax-free. From 1 April 2026, Budget 2026 limits the SGB capital-gains exemption to an individual who subscribed at the original issue and held the bond continuously until redemption on maturity. Because an RBI premature redemption occurs before maturity, its tax treatment must be checked under the rules and guidance applicable when you file.
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When can Series V be redeemed early?
SGB 2019-20 Series V was issued on 15 October 2019. RBI’s rule permits premature redemption only after the fifth year from the issue date and on an interest-payment date. The RBI/IBJA wording is: “premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable.”
For this tranche, the currently reported eligible date is 15 October 2026. Your bank, post office or broker may set an earlier request deadline for processing, so check the intermediary’s notice rather than waiting until the payment date.
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What you need before requesting redemption
- Confirm that the holding is Series V of the 2019-20 issue and that the account or certificate records the correct gram quantity.
- Check whether the bond is held in dematerialised form or as a certificate. Dematerialised investors generally submit the request through the depository participant or broker; certificate holders follow the issuing bank or post office process.
- Ask for the intermediary’s cut-off date, identity requirements and bank-account details for crediting proceeds.
How much is the reported gain?
RBI’s reported premature-redemption price for 15 October 2026 is ₹14,725 per gram. Mint calculated a price appreciation of roughly 289% to 294% against the original issue price, depending on the purchase-price basis used.
This percentage is a price-only comparison. It excludes:
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- the fixed SGB coupon of 2.5% a year, calculated on the original investment amount;
- any tax payable on a redemption that does not qualify for an exemption; and
- brokerage, depository or other processing charges, if your intermediary applies them.
Use the issue price shown on your allotment advice or holding statement when calculating your own return. A quoted 294% is therefore an approximate capital-price gain, not a guaranteed total return for every investor.
What interest do you give up by redeeming?
SGB interest is paid at a fixed 2.5% annually on the original investment amount, not on the higher current gold value. If you redeem on 15 October 2026, future coupon payments stop after redemption. Holding the bond keeps those future coupons in place until the final maturity redemption, subject to the bond’s terms and your continued ownership.
How Budget 2026 changes the tax question
The Union Budget 2026 explanatory memorandum and the Finance Bill state that, from 1 April 2026 (tax year 2026-27 onward), the SGB capital-gains exemption is available only when both conditions are met:
- The individual subscribed at the time of the original issue.
- The individual held the SGB continuously until redemption on maturity.
The wording expressly refers to redemption on maturity. An RBI premature redemption on 15 October 2026 occurs earlier than maturity, so the documents do not clearly establish that the exemption applies. That conclusion is a legal inference from the amended condition, not a quoted rule declaring that every premature redemption is taxable.
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Information to assemble for your tax adviser
- Original issue price and allotment date from the certificate or demat statement.
- Gram quantity redeemed and the RBI redemption price credited.
- Dates and amounts of all coupon payments received.
- Whether the holding was transferred, pledged or otherwise interrupted before redemption.
- Your intermediary’s transaction statement and any tax reporting or withholding details.
Ask a qualified tax professional to confirm the capital-gains computation, the return schedule in which it belongs and whether any withholding applies. Tax guidance can change through notifications or subsequent clarification.
Redeem on 15 October 2026 or hold to maturity?
| Decision factor | Premature redemption | Continue holding to maturity |
|---|---|---|
| Liquidity | Cash is received at the eligible RBI redemption window. | Cash is deferred until final maturity. |
| Gold-price exposure | Exposure ends at the ₹14,725-per-gram redemption price reported for 15 October 2026. | Exposure continues until maturity, so the eventual value can be higher or lower than the 2026 price. |
| Coupon | Future 2.5% coupons stop after redemption. | Future coupons continue while the bond remains held. |
| Capital-gains exemption | Post-1 April 2026 treatment must be assessed; the cited Budget wording does not clearly extend the exemption to an early redemption. | The Budget text expressly describes the exemption for an original subscriber who holds continuously until maturity. |
Redeeming may suit you when
- You need the proceeds for a defined financial goal and accept that future coupons and gold-price participation will end.
- You have verified the tax result and kept documents supporting your purchase price and holding history.
- Your asset allocation has become too concentrated in gold and you want to rebalance.
Holding may suit you when
- You do not need liquidity at the 2026 window.
- You value continued 2.5% coupons and further gold-price exposure.
- You were the original subscriber and have held continuously, making the maturity-based exemption condition easier to establish.
A practical redemption checklist
- Match the bond series, gram quantity and original issue price to your records.
- Confirm that 15 October 2026 is the applicable RBI payment date for your holding and note your bank, post office or broker’s request cut-off.
- Request the intermediary’s written redemption procedure and submit the form or electronic instruction through the channel holding the bond.
- Verify the bank account into which ₹14,725 per gram, multiplied by your redeemed quantity, will be credited, subject to the intermediary’s processing terms.
- Save the redemption advice, account statement and coupon history for your tax records.
- Before filing your return, obtain current advice on whether and how the post-1 April 2026 exemption condition applies to your premature redemption.
Bottom line for Series V holders
The 15 October 2026 window offers a reported ₹14,725 per gram and an approximate 289%–294% price gain over the original issue price, excluding coupons and taxes. Redeeming provides liquidity but ends future coupons and gold exposure. Holding preserves both and aligns more directly with Budget 2026’s stated exemption condition, which is expressly tied to continuous ownership through maturity. Decide only after checking your cash need, records and current tax treatment.
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