RBI Sets ₹9,221 Redemption Price for SGB 2017-18 Series III
The Reserve Bank of India (RBI) has declared a premature redemption price of ₹9,221 per unit for the Sovereign Gold Bond (SGB) 2017-18 Series III, set for early redemption on April 16, 2025. Investors who purchased these bonds at the issue price of ₹2,964 per gram in October 2017 will realize an absolute return of 211.1% over eight years, excluding the semi-annual interest payouts.
Calculation of Redemption Price
The redemption price is determined based on the simple average of the closing gold prices of 999 purity for the preceding three business days before the redemption date, as published by the India Bullion and Jewellers Association Ltd (IBJA). For this tranche, the relevant dates were April 9, April 11, and April 15, 2025.
Tax Benefits and Investment Appeal
SGBs offer notable tax advantages. For individual investors, capital gains arising from redemption are exempt from tax, enhancing the attractiveness of these instruments. Additionally, SGBs provide a fixed annual interest of 2.5%, paid semi-annually, further boosting overall returns.
Conclusion
The substantial returns from the SGB 2017-18 Series III underscore the potential benefits of investing in Sovereign Gold Bonds. With the added advantages of tax exemptions and fixed interest income, SGBs continue to be a compelling option for investors seeking exposure to gold without the need to hold physical assets.
