RBI Announces SGB 2020-21 Series VI Redemption | Key Things To Know

The Sovereign Gold Bond (SGB) Scheme, introduced by the Indian government in November 2015, offers an alternative to physical gold ownership. The scheme aims to reduce reliance on imported gold, discourage hoarding, and direct household savings into financial assets. Recently, the Reserve Bank of India (RBI) announced the premature redemption of SGBs from the 2020-21 Series VI, initially issued on September 8, 2020.

Redemption Details and Pricing

The RBI has allowed early redemption for these bonds as of September 6, 2025. The redemption price is set at Rs 10,610 per unit, reflecting a significant gain of 107.35% over the original issue price of Rs 5,117. This price was calculated using the simple average of closing gold prices published by the India Bullion and Jewellers Association (IBJA) for September 3, 4, and 5, 2025.

"The due date of premature redemption of the (SGB 2020-21 Series VI, issue date September 08, 2020) tranche shall be on September 06, 2025 (September 07 and September 08 being holidays)," stated the RBI.

Terms and Conditions

According to the SGB scheme's terms, these bonds are repayable after eight years from their issue date. However, investors have the option for early redemption after five years. Such repayments align with the next interest payment date. The interest rate on these bonds is fixed at an annual rate of 2.5%, credited semi-annually to investors' bank accounts.

The interest earned from SGBs is taxable under Section 43 of the Income-tax Act, 1961. However, individuals are exempted from capital gains tax upon redemption. Additionally, indexation benefits apply to long-term capital gains for any person transferring these bonds.

While interest income from these bonds is subject to taxation as per Indian tax laws, capital gains tax does not apply to individuals redeeming them. Long-term capital gains arising from bond transfers benefit from indexation advantages.

This initiative by the Indian government not only provides a secure investment avenue but also supports national economic objectives by reducing gold imports and promoting financial asset investments among households.