April 15, 2023 is the last day for the premature redemption of Sovereign Gold Bond (SGB) Scheme (Series III of SGB 2017-18). The due date for this was April 16, but it has been brought forward by a day because tomorrow happens to be a Sunday, which is a non-working day.
The Reserve Bank of India (RBI) recently issued the redemption price for the SGB 2017-18, Series III (Issue date October 16, 2017). The price for this premature redemption has been determined at Rs 6,063 per unit of the gold bond. This is based on the simple average of the closing price of gold in the preceding three days, April 11- April 13, 2023.
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Premature redemption is allowed after the fifth year from the date of issue, on the date the interest is payable, according to a press release issued by RBI.
Important Things To Know About Sovereign Gold Bonds (SGBs)
SGBs are issued in denominations of 1gm of gold and in multiples thereof. Individuals and Hindu Undivided Family (HUF) can invest in a minimum of 1gm and maximum of 4 kg.
One can buy SGBs from designated post offices, nationalised banks, scheduled private banks, Stock Holding Corporation of India Limited (SHCIL), and authorised stock exchanges.
SGBs are issued for eight years, and premature redemption is allowed after five years from the date of issue of coupon payment dates. These bonds are tradable through a dematerialised account and can be transferred to other eligible investors.
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The redemption price for SGBs is based on the simple average of the closing price of 999 purity gold in the previous three business days from the date of redemption. The price considered is what is published by the India Bullion and Jewellers Association Ltd (IBJA).
For premature redemption, one needs to approach the concerned bank, post office within 30 days to one day before the coupon date.
Where SGBs are held till maturity, the redemption price is calculated based on the simple average of the closing price of 999 purity gold for three previous business days from the repayment date.
The redemption amount and the interest are credited to the account provided by the customer at the time of buying the SGB. There is no TDS applicable on SGBs, but the interest received from the bonds is taxable in the hands of customers
