Sovereign Gold Bond premature withdrawal Oct 2022-March 2023: Know dates, early redemption rules

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The Reserve Bank of India (RBI) has released the dates for premature withdrawal of Sovereign Gold Bonds (SGB) issued under various tranches. The central bank has notified the details of the Sovereign Gold Bond tranches, which are due for premature redemption during the period October 1, 2022, to March 31, 2023, along with the window available for submission of request for premature redemption by investors. Sovereign Gold Bond (SGB) Scheme Calendar for premature redemption during October 2022 – March 2023

Sl. NoSGB SeriesIssue DateDate of coupon paymentDates for submitting the request for premature redemption by the investors to the Receiving Offices/NSDL/CDSL/RBI Retail Direct
42016-17 Series I5-Aug-165-Feb-235-Jan-2325-Jan-23
52016-17 Series II30-Sep-1630-Mar-231-Mar-2320-Mar-23
62016-17 Series III17-Nov-1617-Nov-2217-Oct-227-Nov-22
72016-17 Series IV17-Mar-1717-Mar-2317-Feb-237-Mar-23
82017-18 Series I12-May-1712-Nov-2212-Oct-222-Nov-22
92017-18 Series II28-Jul-1728-Jan-2328-Dec-2218-Jan-23
102017-18 Series III16-Oct-1716-Oct-2216-Sep-226-Oct-22
112017-18 Series IV23-Oct-1723-Oct-2223-Sep-2213-Oct-22
122017-18 Series V30-Oct-1730-Oct-2230-Sep-2219-Oct-22
132017-18 Series VI6-Nov-176-Nov-226-Oct-2227-Oct-22
142017-18 Series VII13-Nov-1713-Nov-2213-Oct-223-Nov-22
152017-18 Series VIII20-Nov-1720-Nov-2220-Oct-2210-Nov-22
162017-18 Series IX27-Nov-1727-Nov-2227-Oct-2217-Nov-22
172017-18 Series X4-Dec-174-Dec-224-Nov-2224-Nov-22
182017-18 Series XI11-Dec-1711-Dec-2211-Nov-221-Dec-22
192017-18 Series XII18-Dec-1718-Dec-2218-Nov-228-Dec-22
202017-18 Series XIII26-Dec-1726-Dec-2228-Nov-2216-Dec-22
212017-18 Series XIV1-Jan-181-Jan-231-Dec-2221-Dec-22

Source: RBI website

Investors must note that the above-mentioned dates can change in case of unscheduled holidays, RBI said. “Investors are advised to take note of the period for submission of requests for redemption of the Sovereign Gold Bonds, in case they choose to redeem their holdings before maturity,” it added.

What is the rule for premature withdrawal of Sovereign Gold Bond?

The tenure of Sovereign Gold Bond Scheme is eight years. However, premature withdrawal can be made after the fifth year from the date of issue of coupon payment dates.

How is the redemption price calculated for the premature withdrawal?

The redemption price of Sovereign Gold Bond is based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption as published by the India Bullion and Jewellers Association Ltd (IBJA), as per the RBI website. The central bank separately announces the redemption price of a particular Sovereign Gold Bond tranche.

Example: The price for premature redemption of the Sovereign Gold Bond Scheme 2017-18 Series III has been fixed at Rs 5,069 per unit, according to a press release by the Reserve Bank of India (RBI) on October 14, 2022. The first due date for premature redemption of this tranche is be October 15, 2022, according to the RBI press release. The price is based on the simple average of the closing gold price for the previous three business days, i.e., October 12 – 14, 2022, the central bank said.

Sovereign Gold Bond Scheme: Premature withdrawal rule

In case of premature redemption, investors can approach the concerned bank or Stock Holding Corporation OF India Limited (SHCIL) offices or post office or agent 30 days before the coupon payment date. “Request for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date,” mentions the RBI. The proceeds will be credited to the investor’s bank account provided at the time of applying for the bond.

Income tax implications of premature redemption of Sovereign Gold Bond
The interest rate on the bonds is fixed at 2.50 per cent per annum. The interest earned from the Sovereign Gold Bonds is taxable according to the relevant tax bracket applicable to the investor. Do note that there is no tax deducted at source or TDS on the Sovereign Gold Bond Scheme.

The capital gains earned at the time of maturity of Sovereign Gold Bonds are entirely tax-free. However, investors have to pay taxes if they want to exit before maturity period of eight years. For premature withdrawal, long-term capital gains will be taxed at a rate of 20 per cent with an indexation benefit.

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