Sovereign Gold Bond scheme 2017-18 delivers over 41% CAGR to investors; redemption date today — check details

Investors of Sovereign Gold Bonds (SGB) 2017-18 Series-X stand to earn over 41.6% annualised return as the Reserve Bank of India (RBI) has announced the final date of redemption to be 4 December 2025.

The gold bond (2017-18 series) is repayable on the expiration of eight years from the date of issue of the gold bonds. Accordingly, the final redemption date of the above tranche was decided to be 4 December 2025, the RBI announced.

Annual return of over 41%

The price is fixed at ₹12,820 a unit, 332.96% higher than the issue price of ₹2,964. This means the bonds are delivering an annualised return of 41.6% a year. This excludes the 2.5% annual interest income earned during the holding period.

Interest is paid at a rate of 2.5% semiannually, and the last interest payment is due along with the principal on maturity.

How are they redeemed?

Since the bonds are redeemed at maturity, the amount is credited to the bank account. The RBI typically informs the investors one month in advance about the date of maturity of the bond.

The redemption price is based on a simple average of the closing price of gold of 999 purity for the three business days preceding the repayment date, published by the India Bullion and Jewellers Association Ltd.

However, premature redemption is allowed after the fifth year from the date of issue of bonds, and such repayments are made on the next interest payment date.

How much tax is payable on redemption?

There is no capital gain tax when gold bonds are held until maturity, i.e, 8 years after the date of issue. However, interest (at a rate of 2.5%) is taxable according to the taxpayer's tax bracket. The last instalment of interest is paid along with the redemption amount, and bond subscribers are liable to pay income tax on the interest payments made in this financial year (2025-26).

For all personal finance updates, visit here