Zerodha SGB Redemption

SGB premature redemption window

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SGB premature redemption opens from the 5th year onwards, on coupon payment dates only:

WhenWhat
Years 1-5No premature exit (apart from secondary market sale)
Years 5-8Premature redemption on coupon dates only
Year 8 (maturity)Automatic redemption

How to redeem prematurely

  1. Submit request 30 days before the desired coupon date.
  2. RBI redeems at the average gold price of last 3 days before payment.
  3. Funds credited to your linked bank.

Alternative: secondary market sale

Before 5 years, sell on NSE/BSE secondary market at then-prevailing price. Tax treatment differs from premature redemption.

Tax on premature redemption

  • Cumulative coupons: Already taxed as interest income.
  • Premature redemption gain: LTCG (held 12+ months); tax depends on FY rules.

For complex tax situations, consult a Chartered Accountant.

See also

External references

References

  1. RBI, Sovereign Gold Bond Scheme, rbi.org.in.
  2. Income Tax Act 1961, applicable capital gains provisions.

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