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Sovereign Gold Bonds Investors To Get 153% Return As RBI Announces Early Redemption For This SGB Series
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Sovereign Gold Bonds: The redemption will be permitted on October 20, and the price has been fixed at Rs 12,792 per unit, which is a 153.25% gain over the issue price of Rs 5,051.
The Sovereign Gold Bonds (SGBs) under the 2020-21 Series VII were issued by the RBI on October 20, 2020.
The Reserve Bank of India (RBI) has announced the premature redemption of Sovereign Gold Bonds (SGBs) under the 2020-21 Series VII, issued on October 20, 2020.
The redemption will be permitted on October 20, 2025, and the price has been fixed at Rs 12,792 per unit, which is a 153.25% gain over the issue price of Rs 5,051. This does not include the 2.5% annual interest income earned during the holding period.
“In terms of GOI notification F.No.4(4)-B(W&M)/2020 dated October 09, 2020 (SGB 2020-21 Series-VII-Issue date October 20, 2020) on Sovereign Gold Bond Scheme, premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the due date of premature redemption of the above tranche shall be on October 20, 2025,” the RBI said in a statement dated October 17.
The redemption price has been calculated on the basis of the simple average of closing gold prices published by the India Bullion and Jewellers Association (IBJA) for the three business days – October 15, 16, and 17, 2025.
According to the SGB scheme, the gold bonds shall be repayable on the expiration of eight years from the date of the issue of the bonds. However, premature redemption of the bonds may be permitted after the fifth year from the date of issue of bonds and such repayments will be made on the next interest payment date.
Tax Treatment of Sovereign Gold Bonds
The interest on the SGBs is taxable as per the provisions of the Income-tax Act, 1961 (Section 43 of 1961). The capital gains tax arising on redemption of these bonds to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on the transfer of the bonds.
Interest Rate On SGBs
Interest on the gold bonds, at an annual fixed rate of 2.5%, is credited semi-annually to the bank account of the investors.
What Is The Sovereign Gold Bonds Scheme?
The Sovereign Gold Bond (SGB) Scheme was launched by the Government of India in November 2015 as an alternative to owning physical gold. Issued by the Reserve Bank of India (RBI) on behalf of the Centre, these bonds were denominated in grams of gold and offered investors the dual benefit of earning a fixed annual interest (2.5% on the issue price) along with capital appreciation linked to gold prices. The scheme aimed to reduce India’s dependence on imported physical gold, curb hoarding, and channel household savings into financial assets.
Why Was The SGB Scheme Discontinued?
The government discontinued fresh issuances of SGBs in October 2023, citing that the scheme had largely achieved its objectives and that the cost of managing and servicing the bonds had grown significantly. Another key factor was the availability of other gold investment avenues such as Gold ETFs and digital gold, which reduced the need for periodic SGB issuances. However, existing bonds remain valid, and investors can hold them until maturity or opt for premature redemption as per the scheme’s rules.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
October 18, 2025, 15:48 IST
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Business
Crude oil surpasses $100: WTI up 30%, brent crude reaches $118; what it means? – The Times of India
Oil markets skyrocketed beyond the $100 mark on Monday as Middle East conflict continues to intensify, fueling fears about energy supplies disruption and shipping routes across the region. Brent crude, the global benchmark, climbed past $118 a barrel. US benchmark West Texas Intermediate followed a similar trajectory as the light, sweet crude grade jumped 30% higher than its previous close of $90.90 on Friday.At 0230 GMT, WTI crude climbed 30.04% to $118.21 per barrel before paring some of its gains, while Brent crude was trading 27.54% higher at $118.22.The latest spike came after an already volatile week for oil markets. Last week, US crude prices had surged 36% while Brent rose 28%, as the conflict, now entering its tenth day, began drawing in regions central to the production and transportation of oil and gas from the Persian Gulf.Roughly 15 million barrels of crude oil move through the Strait of Hormuz every day, accounting for about one-fifth of global oil supply, according to independent research firm Rystad Energy. However, the threat of Iranian missile and drone attacks has nearly halted tanker traffic through the narrow waterway. The strait, bordered to the north by Iran, is a critical route for shipments from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran.Export constraints have begun to affect production levels in the region. Iraq, Kuwait and the UAE have reduced oil output as storage facilities fill up due to limited export capacity. At the same time, strikes targeting energy infrastructure have intensified supply concerns, with Iran, Israel and the United States attacking oil and gas facilities since the conflict began.The last time Brent and US crude futures traded near the current levels was in 2022, following Russia’s invasion of Ukraine.Natural gas prices have also moved higher during the conflict, although the gains have been more modest compared to oil. Late Sunday, natural gas was trading at around $3.33 per 1,000 cubic feet, about 4.6% above its Friday closing price of $3.19, after rising roughly 11% during the previous week.Oil’s rise has also begun to show up in fuel prices. In the United States, the average price for a gallon of regular gasoline reached $3.45 on Sunday, about 47 cents higher than a week earlier, according to the AAA motor club. Diesel prices climbed to roughly $4.60 per gallon, up around 83 cents over the same period.Meanwhile, crude oil is also a key ingredient in many everyday consumer goods, including detergents, biscuits, toothpaste, paints and packaging materials. Petroleum-based derivatives are widely used in products such as soaps, shampoos, creams, hair oils, as well as in plastic bottles and tubes. In India, these inputs account for over 25% of production costs for FMCG companies and nearly 40% for paint manufacturers. As a result, if crude oil prices continue to rise, the cost of these daily-use products could increase further.Some analysts and investors have further cautioned that if oil prices remain above $100 a barrel for a prolonged period, the global economy could struggle to absorb the impact.
Major disruption to energy supplies threatens to push up prices for consumers and businesses around the world.
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Saudi Aramco jumped the most since April 2023 on Sunday as the Iran war entered its second week, prompting supply disruptions that may send oil prices higher when global markets reopen. Shares of the state-backed oil giant climbed as much as 4.9% in Riyadh before paring gains to close up 4.1%, on the first day of trading for the stock since Brent crude prices topped $90 a barrel on Friday.Brent may climb further after UAE and Kuwait started reducing oil production amid a near-closure of Strait of Hormuz waterway, adding to interruptions affecting worldwide energy supply and exports. “For Aramco, we believe that the gain in oil prices would offset a decline in exports,” said Junaid Ansari, head of research and strategy at Kamco Investment Co. “We also believe that Aramco should be able to re-route a bulk of its shipments to the Red Sea. It’s just about logistics and handling the excess capacity.” Aramco has been redirecting oil cargoes to Red Sea facilities on Saudi Arabia’s west coast to avoid the Strait of Hormuz.
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Crude oil surpasses $100: WTI up 30%, brent crude reaches $118; what it means? – The Times of India
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