SGB Calculator

Frequently Asked Questions

What are Sovereign Gold Bond Maturity & Withdrawal Rules?

The bonds fully matures at 8 years from the date of issuance. There is also an option of premature redemption after 5 years via RBI. This premature withdrawl after 5 years is only possible on interest payment dates (every 6 months of purchase date). For Example: If you bought in Feb 2024, you can exit earliest in Feb 2029, on an interest payout date. You must approach your bank, post office, or demat account holder to request the premature redemption. This trading of bonds after 5 years via RBI's mechanism happens in primary market.

More on Sovereign Gold Bond Premature Redemption

1. Selling before 5 years

There's no option for withdrawl before 5 years through RBI (i.e. in primary market). But if your SGB bonds are in demat form, you can sell it in secondary market (i.e. through stock exchanges). If you haven't purchased SGB bonds through a demat account then you have to convert your bonds to demat form to sell via secondary market. There is no holding time limitations to sell through stock exchanges (secondary market). Note: Selling through secondary market involves Short/Long term capital gain taxes.

2. Selling between 5 years and 8 years of holding

As said above you can sell your bonds via RBI after 5 years of holding. And at the same time you can sell it through stock exchanges (secondary market) also if bonds are in demat form. So through secondary market there are no holiding period limitations to sell at any point of time

What is interest rate on Sovereign Gold Bond? And How it is paied?

There is interest rate of 2.5% per annum on Sovereign Gold Bonds. It is paid twice a year i.e. every 6 months directly in your bank account

What are taxes on sovereign gold bond?

There are two kinds of taxes, here both plays role with conditions,

1) Capital gain tax and
2) Income tax.

1. If you sell SGB bonds via RBI (primary market),

1.1) Capital Gain tax: No capital gain taxes applicable on your capital appreciation of gold price over holding period.
1.2) Income tax: Yes, as per your tax slab you will incur income tax on interest earned.

2. If you sell through secondary market,

There will be taxes on capital gain and interest earned as explained below.

2.1) Short Term Capital Gain Tax if holding period is below 3 years as per your income slab OR
2.1) Long Term Capital Gain Tax if holding period is more than 3 years. Long Term Capital Gain Tax (LTCG) comes with 20% with indexation benefit OR 10% without indexation (if applicable based on asset classification)

2.3) Income tax: There will be income tax on interest earned, applicable as per your tax slab (same as selling via primary market).

Apart from these regarding TDS (Tax Deducted at Source), there are no TDS payment on either interest payment or capital gains. No one (RBI, bank, broker) will deduct TDS or report it for you.