Sovereign Gold Bonds (SGB) In India: Basics, Issue Calendar, Buying Routes, Redemption & Taxation Vs ETFs/Digital Gold

Gold has always been the Indian household’s favourite asset — from weddings to emergency savings. But in recent years, investors have looked beyond physical jewellery. Sovereign Gold Bonds (SGBs) emerged as one of the most efficient ways to invest in gold — government-backed, interest-paying, and tax-friendly.

However, with the government discontinuing fresh issues after February 2024, existing investors now focus on redemption schedules and taxation, while new investors compare alternatives like Gold ETFs and Digital Gold. Let’s break down everything you need to know.

What are Sovereign Gold Bonds (SGBs)?

Issuer: Reserve Bank of India (RBI) on behalf of the Government of India.
Denomination: In grams of gold (minimum 1 gram).
Tenure: 8 years, with an exit option after 5 years.
Interest: Fixed 2.5% p.a., paid every six months.
Maximum investment: 4 kg per individual/HUF, 20 kg for trusts and institutions.
Mode of holding: Physical certificate or demat account.
Tradability: Can be traded on NSE/BSE after issuance.
Collateral: Eligible as collateral for loans with LTV as per RBI rules.

This makes SGBs unique among gold products, since they combine the security of gold price appreciation with fixed interest income.

Issue Calendar – Latest Update

The last tranche was SGB 2023-24 Series IV (Feb 2024).
Since then, no new issues have been scheduled. In February 2025, the Ministry of Finance clarified that SGBs have been discontinued due to cost considerations.

That means:
New investors → look at secondary market SGB units (traded on NSE/BSE), or alternatives like ETFs/digital gold.
Existing holders → focus on redemption.

Want to explore smarter gold investments?

Check our Gold & Investment Tools to compare returns, taxation, and strategies.

Explore Tools

Buying Routes (When Active)

Historically, investors could buy SGBs through:

Banks: SBI, ICICI, HDFC, Axis, etc. (via net banking or branch).
Post offices & SHCIL offices.
Brokers & Exchanges: NSE/BSE, Zerodha, Groww, etc.
RBI Retail Direct portal — direct access to government securities.

Even now, you can still buy older SGBs in the secondary market, though liquidity and pricing vary.

Premature Redemption Rules

Although maturity is 8 years, investors can exit after the 5th year.

How it works:
- RBI notifies premature redemption windows every 6 months.
- Investors must submit requests through banks, depositories, or portals.
- Redemption price = average of last 3 working days’ closing price of 999 purity gold published by IBJA.
Redemption Windows (2025):
- Apr–Sep 2025: Series from 2017–2020 becoming eligible.
- Oct 2025–Mar 2026: Series from 2018–2021 scheduled.

If you miss the RBI window, you can still sell units anytime on stock exchanges, subject to market demand.

Taxation of SGBs

Interest income (2.5%) → Taxable as per your slab.
Redemption at maturity (8 years): Completely tax-free capital gains.
Premature redemption: Gains are taxed as capital gains — long term (20% with indexation) if held >3 years; short term if <3 years.
Secondary market sale: Normal capital gains rules apply.

Why it matters: No other gold instrument in India offers 100% tax-free maturity gains.

SGB vs Gold ETFs vs Digital Gold

Feature	SGB	Gold ETFs	Digital Gold
Backing	Government bond, linked to gold price	Mutual fund invests in gold bullion	Platform holds equivalent gold in vaults
Returns	Gold price + 2.5% interest	Gold price only	Gold price only
Liquidity	8 years (exit after 5 yrs / market trade)	High (buy/sell any time)	Instant (buy/sell anytime)
Taxation	Tax-free at maturity; interest taxable	Capital gains taxed (ST/LT)	Capital gains taxed (ST/LT)
Extra Costs	None (no making charges)	Expense ratio + brokerage	Spreads, platform fee
Collateral Use	Yes, accepted by banks	No	Rarely

Why It Matters for Investors

Long-term wealth creation: SGBs reward patience with tax-free gains.
Diversification: Gold protects against inflation and market volatility.
Better than jewellery: No making charges, no storage issues.
Clarity on redemption: Knowing RBI windows helps maximize returns.

Sovereign Gold Bonds may not see new issues in 2025, but they remain a premium investment option for existing holders thanks to their unique mix of safety, returns, and tax benefits. For new investors, ETFs and digital gold provide liquidity, but none match SGBs on tax efficiency.