What is a Sovereign Gold Bond?

A Sovereign Gold Bond is a government security issued by the Reserve Bank of India on behalf of the Government of India. You pay cash. The bond is counted in grams of gold. On redemption the Reserve Bank pays cash, using the gold price of that week. It is the gold product the Reserve Bank issues. A digital-gold balance on an app is not this bond.

RBI’s FAQ, and the calendar for 2023-24 Series IV, set the shape of the bonds that were issued. Interest is 2.5% a year on the price paid at issue, credited twice a year. The tenor is 8 years. From the 5th year, the holder can ask for premature redemption on an interest date. The smallest bond is 1 gram. In a fresh issue the ceiling was 4 kg for an individual, 4 kg for a Hindu undivided family, and 20 kg for a trust, in a financial year. The issue price, and the redemption price, use the simple average of the closing price of 999 gold published by the India Bullion and Jewellers Association for the three working days before the relevant week. The bond can sit in demat and trade on the exchange. Only the demat form trades.

The last window RBI opened was 2023-24 Series IV. Subscription ran 12–16 February 2024. The bonds were issued on 21 February 2024 at ₹6,263 per gram. Online buyers who paid digitally were charged ₹50 less. That discount belonged to that issue. Checked on 29 October 2026, the Reserve Bank’s Sovereign Gold Bond page does not list a later subscription calendar. The 2026 releases on that page are redemption prices for series issued years ago, including premature redemption from the fifth year and final redemption at eight years.

Bonds already in people’s names

Those bonds keep working. Interest still arrives. A demat holder can sell on the exchange, and the traded price can sit above or below the value of the grams. Premature redemption is with the bank, post office or SHCIL, once five years have passed, on an interest date. The FAQ says the office can take the request if it arrives at least a day before the interest is paid.

Interest is taxed in the year it is paid, at your slab. RBI’s FAQ says the bond itself is not subject to TDS, and that the holder still has to follow the tax law. The capital-gains rule changed from 1 April 2026. Section 70(1)(x), as substituted by the Finance Act, 2026, says a redemption is not a transfer if an individual held the bond from the original issue till maturity. A purchase on the exchange does not make you that holder. A sale before maturity, and a premature redemption, are transfers. The tax answer inside the 2019 RBI FAQ is older than that amendment. Use the tax on gold guide for tax year 2026-27.

Mistakes people make

• Walking into a bank this Diwali to subscribe. The last issue was February 2024.
• Treating a digital-gold app as this bond. SEBI’s 8 November 2025 caution puts digital gold outside SEBI.
• Using the 2019 FAQ as the capital-gains rule for tax year 2026-27.
• Buying on the exchange and expecting the original-holder exemption to follow the bond.

Where to read on

The gold options guide compares the bond with jewellery, coins, gold ETFs, gold funds and digital gold. On the capital gains calculator, the Reserve Bank redemption row is only for a bond held from the original issue until maturity. A sale on the exchange uses the listed-gold row.