Tax-free early withdrawal of Sovereign Gold Bond (SGB) is permitted only during this 21-day annual window.

Tax-free early withdrawal of Sovereign Gold Bond (SGB) is permitted only during this 21-day annual window.

Sovereign Gold Bond (SGB)
Sovereign Gold Bond (SGB)

If a retail individual investor wants to redeem his Sovereign Gold Bond (SGB) investment early and avoid paying income tax on capital gains, he can apply for early redemption from the RBI. However, this initial renewal window is usually 21 days and opens only after a certain interval.

RBI opens the SGB buyback window every year from the fifth year of the special SGB tranche. “Though the tenure of the bond is 8 years, the advance money/..

What is the time limit for RBI to tender for early redemption of SGBs?
There is a specific annual time limit within which the SGB investor has to apply for early redemption after completing 5 years of investment. If the SGB is not submitted to the Sovereign Gold Bond (SGB) Reserve Bank within this period, the SGB cannot be encashed in the relevant year. Next time the investor has to wait for the initial redemption window of that particular SGB to open.

Sovereign Gold Bond (SGB)
Sovereign Gold Bond (SGB)

According to the RBI FAQs on SGBs, “In case of early withdrawal, the depositors may approach the concerned bank/SHCIL offices/post office/agent thirty days prior to the coupon payment date.”

Mukesh Chand, Senior Advisor, Economic Legal Practice, said, “Investors’ demand for early redemption should be processed within a specified time. SGB depositors should inform the concerned Sovereign Gold Bond (SGB) Receiving Office or Bank/SHCIL/Post Office within 29 Required Day.” Coupon Date.”

Chand illustrates the idea of SGB’s 

liberation period with an example. He said, “If an investor invests in the SGB 2018-19 Series V Tranche issued on January 22, 2019…

“The early redemption window opens thirty days prior to the interest payment date and closes one day prior to the relevant interest payment date. Investors wishing to use the Sovereign Gold Bond (SGB) early redemption option should bear this in mind as demand for early redemption may increase. . . . During this time, the investor waits for the next early redemption window.” There should be,” says Sharma.

Sovereign Gold Bond (SGB)
Sovereign Gold Bond (SGB)

It should also be noted that interest on SGBs is paid semi-annually.

According to Chand, “As per the operational guidelines issued by the RBI for banks etc., the request for early withdrawal of SGB should be submitted by the depository participant (in case of Sovereign Gold Bond (SGB) demat account) to the receiving office or depository at least 10 Days ago. before the next interest payment date, so the delay is 10 days before the coupon date.”

Explains the reason for the 10-day gap between SGB’s payment of interest and the due date of its advance payment.

Leave a Comment