RBI Announces 211 Per Cent Return For 2017-18 SGB Series III On Premature Exit

The Reserve Bank of India (RBI) has declared a premature redemption price of Rs 9,221 per unit for the Sovereign Gold Bond (SGB) 2017-18 Series III, which is set to expire early on April 16, 2025. Investors who purchased SGBs in this series at the initial issue price of Rs 2,964 per gram in October 2017 can now expect a total return of 211.1 per cent over eight years, excluding semi-annual interest distributions.

What Is The Redemption Price

The RBI has notified that the deadline for premature redemption of the Series III SGB 2017-18 tranche is April 16, 2025. The redemption price for this cycle is Rs 9,221 per unit, based on gold rates from April 9, 11, and 15, 2025. Notably, the redemption price is based on the simple average of the closing gold price of 999 purity from three business days prior to the redemption date. The RBI's circular noted that the next deadline for premature redemption is April 16, 2025.

When Can You Exit?

SGBs have an eight-year maturity period, however, early redemption is permitted starting from the fifth year on interest payout days (twice per year). While the eventual maturity date is October 2025, the April redemption window allows investors to choose whether to stay invested and hope for better gold prices or to book their profits.

Key Figures at a Glance

Metric Value

Issue Price (Oct 2017) Rs 2,964 per gram

Premature Redemption Price (Apr 2025) Rs 9,221 per unit

Absolute Gain per Unit Rs 6,257

Total Return 211.1 per cent

Interest Payout 2.5 per cent p.a., semi-annually

Tax on Redemption No capital gains tax (for individuals via RBI window)

Tax Implications: Redemption vs Secondary Sale

Tax-Free Redemption: Individual investors enjoy capital gains tax exemption when redeeming through the RBI window.

No Exemption for Entities: Companies, Hindu Undivided Families (HUFs), and others are not eligible for this exemption.

Stock Exchange Sales: Individual sales on exchanges will also attract capital

gains tax—the tax exemption benefit only applies to RBI redemptions.