Sovereign Gold Bond 2019-20 Series-VI: RBI announces redemption price, investors to get 213% absolute return

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As investors gear up for the next premature redemption window of the Sovereign Gold Bond (SGB) 2019-20 Series-VI, the Reserve Bank of India (RBI) has announced the redemption price for this tranche. Eligible investors will be able to redeem their bonds on October 30, 2025, marking five years since the bond's original issue date of October 30, 2019.

Redemption allowed after five years

Under the Government of India's notification dated September 30, 2019, premature redemption of SGBs is allowed after the fifth year from the date of issue, but only on an interest payment date. For the Series-VI tranche, this redemption opportunity falls on October 30, 2025. Investors who choose to redeem will receive the redemption proceeds directly into their registered bank accounts.

How the redemption price is calculated

The redemption price is determined based on the simple average of the closing prices of gold (999 purity) published by the India Bullion and Jewellers Association Ltd (IBJA) for the three business days preceding the redemption date.

For the upcoming redemption on October 30, 2025, the RBI has fixed the redemption price at Rs 11,992 per unit of SGB. This figure is based on the average gold prices recorded on October 27, 28, and 29, 2025.

Investor Returns: Over 213% gain in six years

Investors who purchased the Series-VI bonds at the issue price of Rs3,788 per gram in October 2019 are set to receive Rs11,992 per gram upon redemption in October 2025. This translates into a capital appreciation of nearly 213%.

What is the Sovereign Gold Bonds scheme?

SGB Scheme was introduced by the Indian government in November, 2025 as an alternative to attract gold ownership. The bonds were issued by the RBI for and on behalf of the Centre. The bonds denominated in grams of gold offered investors dual benefit-- earning a fixed annual interest of 2.5% on the issue price and earning capital appreciation linked to gold prices. The scheme majorly aimed to reduce India’s reliability on imported physical gold, curb hoarding, and channel household savings into financial assets.

The bonds have a fixed term of eight years, but investors can exit after five years on interest payment dates if they wish. SGBs can also be traded on stock exchanges, transferred to others, or used as collateral for loans.

What is the tax treatment of Sovereign Gold Bonds

As per the provisions of the Income-tax Act, 1961 (Section 43 of 1961) the interest on the SGBs is taxable. When an individual redeems these bonds, they are free from paying capital gains tax. Any capital gains that result from the transfer of the bonds on the exchange will be eligible for the indexation benefits.