The price has been calculated based on the simple average of the closing price of gold of 999 purity for the previous three business days, as published by the India Bullion and Jewellers Association (IBJA).
As per the provisions of the Income-tax Act, 1961 (Section 43 of 1961) the interest on the SGBs is taxable.
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.
The Central Bank said that the redemption price has been calculated based on the simple average of the closing price of gold of 999 purity for the previous three business days—December 15, 16 and 17, 2025—as published by the India Bullion and Jewellers Association (IBJA).
Majority of the Sovereign Gold Bonds have been trading at a premium on secondary markets as street chatter grows that the government might halt any more tranches. To add to this, the Reserve Bank of India recently allowed premature redemption of SGBs issued between May 2017 and March 2020. Lovisha Darad discusses if investors should hold on to their SGBs until maturity or not.
Gold has long been a popular investment choice for Indians, not only as a symbol of wealth but also as a cherished asset created and passed down through generations. It has so far been seen as a reliable investment, broken only under very dire circumstances.
Sovereign gold bonds are trading above the reference rate, due to their tax advantage and coupon rate. But with news of lesser or no future issuances, listed SGBs are becoming even more popular.
The government may go slow or just stop on issuing gold bonds altogether, as Moneycontrol has reported. For those who wish to buy them, some existing listed ones offer a good option
Investors are gradually warming to non-physical forms of gold such as ETFs and SGBs
The launch of SGB Scheme 2023-2024 Series III has come on the back of gold prices increasing by more than 10 percent in 2023 and defying expectations amid a high interest rate environment.
Gold ETFs move in line with gold prices but SGBs while moving in tandem with gold prices also carry a 2.5 percent annual interest (simple interest), which may seem small, but over the years makes a big difference. If one adds the AMC fees and taxation costs, the difference is wide enough to make investors move to SGB.