SGB Redemption Dates April to September: Process and Tax Guidelines
Tax February 27, 2025
Siddhi Sharma
Money Coach, Lxme } NISM Certified
The Reserve Bank of India (RBI) released a press statement on February 21, 2025, detailing the Sovereign Gold Bond (SGB) tranches eligible for premature redemption of SGB between April and September 2025. This blog will cover what is premature redemption, the submission window for investors looking to encash their SGBs before maturity, the process to apply for premature redemption, tax implications, and whether you should redeem your SGB or not.
Sovereign Gold Bonds (SGBs) are government-backed securities that allow investors to invest in gold electronically i.e. without holding physical gold. While these SGBs have an 8-year maturity period, investors have the option for premature redemption of SGB after the 5th year.
What is Premature Redemption in SGBs?
SGB premature redemption refers to the option for SGB investors to exit their investments early, before the 8-year maturity period. Starting from the 5th year, investors can redeem their bonds as per RBI interest payment dates. This provides flexibility for those who may need liquidity before the bond’s maturity.
What are the Upcoming Premature Redemption Dates?
The Reserve Bank of India (RBI) has announced the premature redemption schedule for various SGB tranches between April and September 2025. Below is a summary:
| S No | Tranche | Issue Date | Date of premature redemption | Dates for submitting the request for premature redemption by the investors to the Receiving Offices/NSDL/CDSL/RBI Retail Direct | |
| From | To | ||||
| 1 | 2017-18 Series III | 16-Oct-17 | 16-Apr-25 | 17-Mar-25 | 7-Apr-25 |
| 2 | 2017-18 Series IV | 23-Oct-17 | 23-Apr-25 | 24-Mar-25 | 15-Apr-25 |
| 3 | 2017-18 Series V | 30-Oct-17 | 30-Apr-25 | 31-Mar-25 | 21-Apr-25 |
| 4 | 2017-18 Series VI | 6-Nov-17 | 6-May-25 | 5-Apr-25 | 28-Apr-25 |
| 5 | 2017-18 Series VII | 13-Nov-17 | 13-May-25 | 11-Apr-25 | 3-May-25 |
| 6 | 2017-18 Series VIII | 20-Nov-17 | 20-May-25 | 19-Apr-25 | 13-May-25 |
| 7 | 2017-18 Series IX | 27-Nov-17 | 27-May-25 | 25-Apr-25 | 17-May-25 |
| 8 | 2017-18 Series X | 4-Dec-17 | 4-Jun-25 | 5-May-25 | 26-May-25 |
| 9 | 2017-18 Series XI | 11-Dec-17 | 11-Jun-25 | 9-May-25 | 2-Jun-25 |
| 10 | 2017-18 Series XII | 18-Dec-17 | 18-Jun-25 | 19-May-25 | 9-Jun-25 |
| 11 | 2017-18 Series XIII | 26-Dec-17 | 26-Jun-25 | 27-May-25 | 16-Jun-25 |
| 12 | 2017-18 Series XIV | 1-Jan-18 | 1-Jul-25 | 31-May-25 | 21-Jun-25 |
| 13 | 2018-19 Series I | 4-May-18 | 3-May-25 | 3-Apr-25 | 23-Apr-25 |
| 14 | 2018-19 Series II | 23-Oct-18 | 23-Apr-25 | 24-Mar-25 | 15-Apr-25 |
| 15 | 2018-19 Series III | 13-Nov-18 | 13-May-25 | 11-Apr-25 | 3-May-25 |
| 16 | 2018-19 Series IV | 1-Jan-19 | 1-Jul-25 | 31-May-25 | 21-Jun-25 |
| 17 | 2018-19 Series V | 22-Jan-19 | 22-Jul-25 | 21-Jun-25 | 14-Jul-25 |
| 18 | 2018-19 Series VI | 12-Feb-19 | 12-Aug-25 | 11-Jul-25 | 2-Aug-25 |
| 19 | 2019-20 Series I | 11-Jun-19 | 11-Jun-25 | 9-May-25 | 2-Jun-25 |
| 20 | 2019-20 Series II | 16-Jul-19 | 16-Jul-25 | 16-Jun-25 | 7-Jul-25 |
| 21 | 2019-20 Series III | 14-Aug-19 | 14-Aug-25 | 15-Jul-25 | 4-Aug-25 |
| 22 | 2019-20 Series IV | 17-Sep-19 | 17-Sep-25 | 18-Aug-25 | 8-Sep-25 |
| 23 | 2019-20 Series V | 15-Oct-19 | 15-Apr-25 | 15-Mar-25 | 5-Apr-25 |
| 24 | 2019-20 Series VI | 30-Oct-19 | 30-Apr-25 | 31-Mar-25 | 21-Apr-25 |
| 25 | 2019-20 Series VII | 10-Dec-19 | 10-Jun-25 | 9-May-25 | 31-May-25 |
| 26 | 2019-20 Series VIII | 21-Jan-20 | 21-Jul-25 | 21-Jun-25 | 11-Jul-25 |
| 27 | 2019-20 Series IX | 11-Feb-20 | 11-Aug-25 | 11-Jul-25 | 1-Aug-25 |
| 28 | 2019-20 Series X | 11-Mar-20 | 11-Sep-25 | 12-Aug-25 | 1-Sep-25 |
| 29 | 2020-21 Series I | 28-Apr-20 | 28-Apr-25 | 29-Mar-25 | 19-Apr-25 |
| 30 | 2020-21, Series II | 19-May-20 | 19-May-25 | 19-Apr-25 | 9-May-25 |
| 31 | 2020-21, Series III | 16-Jun-20 | 16-Jun-25 | 17-May-25 | 6-Jun-25 |
| 32 | 2020-21, Series IV | 14-Jul-25 | 14-Jul-25 | 13-Jun-25 | 4-Jul-25 |
| 33 | 2020-21, Series V | 11-Aug-20 | 11-Aug-25 | 11-Jul-25 | 1-Aug-25 |
| 34 | 2020-21, Series VI | 8-Sep-20 | 8-Sep-25 | 8-Aug-25 | 29-Aug-25 |
Should you apply for Premature Redemption?
1. Hold your SGBs till maturity of 8 years and enjoy zero long term capital gains tax! But if you withdraw prematurely then you will have to pay long term capital gain tax.
2. SGBs are a long-term investment, and the longer you hold them, the more you benefit!
3. Need funds urgently? That’s what an Emergency Fund is for! Keep your SGBs untouched to maximize growth.
4. If you want to stay invested till maturity then don’t worry about these timelines & news as at maturity your money will get directly credited to your bank account.
What are the Tax Implications of Premature Redemption?
One of the significant benefits of SGBs is the tax treatment upon redemption. Let’s look what are the tax implications:
1. Interest Income: The semi-annual interest received (currently at 2.50% per annum) is taxable under “Income from Other Sources” and must be declared in your income tax return. Note: Interest on tax is applicable even when you stay invested till maturity of 8 years.
2. Invested Till Maturity: If you stay invested in SGB till maturity of 8 years then the long-term capital gain i.e. returns you earn is tax-free. That means you don’t have to pay any taxes.
3. Redeem Prematurely: If the bonds are withdrawn in the secondary market before maturity, the gains are subject to capital gains tax, without indexation benefits for long-term holdings. As the holding period will be either 5 years or more the tax applicable will be 12.5% without indexation as per recent provisions.
How to Apply for SGB Premature Redemption?
To proceed with premature redemption of SGB, follow these steps:
- Determine Eligibility: Ensure your SGB tranche is eligible for premature redemption (i.e., it has been completed at least 5 years since the issue date).
- Application Window: Identify the application window for your specific tranche as per the RBI schedule mentioned above.
- Submit Request:
- Physical Holdings: Visit the bank, post office, or agent where you purchased the SGB and submit a redemption request at least 10 days before the interest payment date.
- Demat Holdings: Bonds held in demat form can be traded on exchanges and transferred to eligible investors.
- Receive Proceeds: Upon successful processing, the redemption amount will be credited to your registered bank account on the redemption date.
It’s essential to adhere to the specified timelines and provide any required documentation to ensure a smooth redemption process.
Current Status of New SGB Issuances
No New SGBs will be issued. The Indian government has decided to discontinue the Sovereign Gold Bond (SGB) scheme, citing high borrowing costs. Finance Minister Nirmala Sitharaman confirmed this decision during the post-Budget press conference on February 1.
What Happens to Your Existing SGBs?
No need to worry! If you have already invested in SGBs, your money is completely safe.
RBI issues these bonds and your SGBs will mature as per the original terms mentioned on your certificate. This premature redemption of SGB news is applicable to the existing investors.
Now you might be thinking about how to invest in gold smartly right? Don’t worry we have a way.
SGBs were a great way to invest in gold, but there are smart alternatives! If you want to invest in gold, you can explore Gold Mutual Funds.
Sovereign Gold Bonds (SGBs) offer a great way to invest in gold with tax-free capital gains at maturity. However, premature redemption comes with tax implications, making it less beneficial unless necessary.
With no new SGB issuances, investors seeking flexible gold investments can explore Gold Mutual Funds, which offer liquidity, affordability, and ease of investing.
If you wish to invest in gold smartly with a gold mutual fund then check out Lxme’s Rs.100 Gold Fund which is well-researched and curated by experts.
FAQs
How can I initiate the premature redemption process for my Sovereign Gold Bonds?
To redeem your SGB early, ensure it’s eligible (5+ years completed) and apply within the RBI’s specified window. Submit a request at your bank/post office (if held in physical certificate form) or trade on exchanges (if held in demat form). The amount will be credited to your bank account upon processing
Are there any fees or penalties involved in the premature redemption of SGBs?
No, there are no fees or penalties. However, capital gains tax will be applicable on premature redemption of SGB at the rate of 12.5% without indexation benefit.
Further read:
Please note, The Lxme Dream Card services has been discontinued from 30th November, 2024 to make way for something very exciting!
Sorry for the inconvenience caused and stay tuned for something really special!
New Investor? Request a Callback.
Fill in your details and we will guide you at every step
other blogs
Tax January 28, 2025
Difference Between Tax Planning and Tax Management
Many of us, feel that tax-related strategies are only for big businesses or the super-rich. But, as women managing households, careers, and financial independence, understanding tax planning in wealth management is a powerful tool for wealth creation. Let’s break down the difference between tax planning and tax management in a way that’s simple, practical, and … Difference Between Tax Planning and Tax Management
By Siddhi Sharma
Tax August 26, 2024
Best Tax Saving Tips for Women Entrepreneurs
Riya: Hey, Neha! I’ve been stressing over taxes. Running my own business is rewarding, but the taxes are overwhelming. Neha: I totally get it, Riya! I’ve been there too. But guess what? I found some amazing tax-saving tips specifically for women entrepreneurs like us. Riya: Really? That sounds exactly like what I need! Tell me … Best Tax Saving Tips for Women Entrepreneurs
By Siddhi Sharma
Career Tax May 28, 2024
Financial Year vs Assessment Year: What’s the Difference?
A common confusion among women is the difference between Financial year vs Assessment year. While it may be easy to get confused between the two, there are some very important differences between the terms. As a woman, it is imperative to understand the difference between Assessment year vs Financial year so that no errors are … Financial Year vs Assessment Year: What’s the Difference?
By Abhibyakti Singh