Final SGB redemption today: SGB 2018-19 Series II delivers 358% returns; new income tax rules may affect your gains

Investors who bought Sovereign Gold Bonds (SGBs) in October 2018 are set to receive ₹14,425 per unit as the bonds reach their eight-year maturity on October 23, 2026. The Reserve Bank of India (RBI) has fixed the final redemption price for the SGB 2018-19 Series II tranche, offering investors a substantial increase over the original issue price.

The Government of India had issued these gold bonds at ₹3,146 per gram in October 2018. At the final redemption price of ₹14,425 per unit, the value has increased more than fourfold, excluding the interest paid during the holding period.

The RBI notification states that the final redemption price “shall be ₹14,425/- (Rupees Fourteen Thousand Four Hundred and Twenty-Five only) per unit of SGB”.

SGB 2018-19 Series II: How much will investors earn?

The original issue price of the SGB 2018-19 Series II tranche was ₹3,146 per gram. Investors who applied online and paid through digital mode received a discount of ₹50 per gram, bringing their purchase price to ₹3,096.

These figures represent capital appreciation and exclude interest payments received during the eight-year holding period. The actual return for an investor will depend on the original purchase price and the interest received.

SGB final redemption: How has the RBI calculated the price?

The RBI has fixed the final redemption price using the average closing price of 999-purity gold for October 19, October 21 and October 22, 2026. The prices were published by the India Bullion and Jewellers Association Ltd.

The bonds were originally issued on October 23, 2018, and are repayable after eight years under the Sovereign Gold Bond Scheme. Accordingly, October 23, 2026, is the final redemption date for this tranche.

SGB tax rules from April 1, 2026: Will investors pay tax?

Under the revised provisions, the capital gains tax exemption on redemption at maturity is available to individual investors who subscribed to the bonds at the time of the original issue and held them continuously until maturity, subject to the applicable conditions.

For the SGB 2018-19 Series II tranche, individuals who subscribed during the original issue in October 2018 and held the bonds continuously until maturity on October 23, 2026, may qualify for the exemption.

SGB 2018-19 Series II: What was the original issue price?

The Ministry of Finance announced the issue price in October 2018, with subscriptions open from October 15 to October 19 and settlement scheduled for October 23, 2018.

The regular issue price was ₹3,146 per gram. An online discount of ₹50 per gram was available to investors who applied digitally and paid through digital mode, reducing the price to ₹3,096 per gram.