The redemption price for the tranche has been fixed at ₹16,012 per unit. The bonds were issued in November 2020 at ₹5,127 per gram for investors applying online and making digital payments, and at ₹5,177 per gram for offline subscribers.
This translates into gains of around 212% for online investors and about 209% for offline investors, without including the fixed annual interest paid under the scheme.
Under the terms of the Sovereign Gold Bond Scheme, premature redemption is allowed after the fifth year from the date of issue on interest payment dates. The SGB 2020-21 Series-VIII bonds were issued on November 18, 2020, and the next eligible redemption date falls on May 18, 2026.
The redemption price has been calculated on the basis of the simple average of closing prices of 999 purity gold published by the India Bullion and Jewellers Association Ltd (IBJA) for the three business days preceding redemption — May 13, May 14 and May 15, 2026.
Sovereign Gold Bonds are government-backed securities linked to gold prices and are denominated in grams of gold, offering investors an alternative to holding physical gold.
SGBs have a total maturity period of eight years and aim to provide exposure to gold prices in financial form while reducing reliance on physical gold.
Separately, tax rules for SGBs have changed from April 1. Capital gains tax exemption on redemption at maturity will now apply only to investors who subscribed during the primary issuance and hold the bonds until maturity. Investors who purchased SGBs from the secondary market will not be eligible for tax-free redemption, even if held to maturity.
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