SGB 2020-21 Series IX Early Exit: RBI Sets Redemption Price, Delivers Over 150% Return

SGB Premature Redemption 2020-21 Series IX: The Reserve Bank of India has announced that the Sovereign Gold Bond Scheme for the 2020-21 Series-IX, which was originally issued on January 05, 2021), is available for premature redemption from January 05, 2026, due to the completion of five years from the date of issue.

The redemption price of SGB is based on simple average of closing price of gold of 999 purity of the previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).

What Is The Redemption Price For SGB 2020-21 Series-IX Series

The redemption price for premature redemption due on January 05, 2026, is Rs 13,381/- per unit of SGB based on the simple average of the closing price of gold for the three business days i.e., December 31,

2025, January 01, 2026, and January 02, 2026.

How Much Did Investors Get?

The Sovereign Gold Bond (SGB) 2020–21 Series IX, issued on January 5, 2021, was offered at an issue price of Rs 5,177 per unit. Investors who applied online received a Rs 50 per unit discount and paid Rs 5,127.

Based on the original issue price, offline investors have earned an absolute gain of about Rs 8,200 per unit, while online subscribers have gained roughly Rs 8,250 per unit.

This translates into price appreciation of nearly 158 percent for offline investors and around 161 percent for those who invested online over a five-year period.

In addition to the rise in gold prices, SGB holders also received an annual interest of 2.5 percent, paid in two instalments every year. This interest component further boosts the overall effective return, making the total gains from the investment even higher.

Tax Treatment of Sovereign Gold Bonds

The interest on the SGBs is taxable as per the provisions of the Income-tax Act, 1961 (Section 43 of 1961). The capital gains tax arising on redemption of these bonds to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on the transfer of the bonds.

What Is The Sovereign Gold Bonds Scheme?

The Sovereign Gold Bond (SGB) Scheme was launched by the Government of India in November 2015 as an alternative to owning physical gold. Issued by the Reserve Bank of India (RBI) on behalf of the Centre, these bonds were denominated in grams of gold and offered investors the dual benefit of earning a fixed annual interest (2.5% on the issue price) along with capital appreciation linked to gold prices. The scheme aimed to reduce India’s dependence on imported physical gold, curb hoarding, and channel household savings into financial assets.