SGB 2018-19 Series III Final Redemption Price ₹14,024: Who Pays Tax on Maturity

The Reserve Bank of India has fixed the SGB 2018-19 Series III final redemption price at ₹14,024 per unit (one unit is one gram of gold). The bond completes its eight-year term today, 13 November 2026, and the price was announced in RBI press release 2026-2027/1486 dated 12 November 2026. Holders do not need to apply: the maturity amount is paid automatically, together with the last half-yearly interest coupon.

The series was issued on 13 November 2018 under a Government of India notification dated 8 October 2018. As with every tranche, the redemption price is the simple average of the closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd (IBJA) for the three business days before repayment, which this time were 10, 11 and 12 November 2026.

SGB 2018-19 Series III issue price and return at maturity

Subscription for this tranche ran from 5 to 9 November 2018. Under RBI press release 2018-2019/1041 of 2 November 2018, the nominal issue price was ₹3,183 per gram, and investors who applied online and paid digitally got a ₹50 discount, paying ₹3,133 per gram.

Against the ₹14,024 redemption price, that works out to a gain of ₹10,841 per gram (about 340.6%) for offline subscribers and ₹10,891 per gram (about 347.6%) for online subscribers, before counting interest. The bond also paid 2.5% a year on the initial investment in half-yearly instalments; at the nominal price of ₹3,183, sixteen coupons over eight years add up to about ₹636.60 per gram, of which the final coupon of roughly ₹39.79 is credited with the principal.

Investors who held on rather than leaving through the premature window last year have done better. The premature redemption price for this series on 13 November 2025 was ₹12,350 per unit, so waiting the final year added ₹1,674 per gram, or about 13.6%. The price is, however, ₹401 lower than the ₹14,425 fixed three weeks ago for SGB 2018-19 Series-II, which matured on 23 October 2026, because IBJA gold prices eased between the two averaging windows.

Is SGB redemption at maturity tax-free in 2026?

This is the first November maturity under the Income-tax Act, 2025, and the answer depends on how the units were acquired. Under the old Act, redemption of a sovereign gold bond by an individual was not treated as a transfer, so no capital gain arose, whoever the holder was. The Budget 2026 change narrowed this. From 1 April 2026, section 70(1)(x) of the Income-tax Act, 2025, as amended by the Finance Act, 2026, keeps the maturity gain exempt only where an individual subscribed to the bond at its original issue and held it continuously until redemption on maturity.

For Series III, that leaves four groups of holders:

• An individual who was allotted the bonds in November 2018 and still holds them: the gain on maturity is exempt.
• An individual who bought units on NSE or BSE and has held them for more than 12 months: the gain is a long-term capital gain taxed at 12.5%, plus surcharge and 4% health and education cess.
• An individual who bought on the exchange within the last 12 months, that is after 13 November 2025: the gain is short-term and taxed at slab rates.
• A trust, HUF or other non-individual holder: the exemption is written for individuals, so the gain is taxable on the cost actually paid.

Units received from another holder rather than allotted at issue also fall outside the exemption, even if held to maturity. Where an investor holds both an original allotment and units bought later, the two lots have to be kept apart: only the November 2018 allotment qualifies, and the purchased lot is taxed on its own cost. The Certificate of Holding issued on the date of issue, showing the allotment in the investor's name, is the document that proves original subscription.

Worked example: tax on an exchange-bought Series III holding

As an illustration, take an individual who bought 20 units of SGB 2018-19 Series III on the exchange at ₹9,000 each in January 2025. The maturity proceeds are 20 × ₹14,024 = ₹2,80,480. The cost is 20 × ₹9,000 = ₹1,80,000, so the long-term capital gain is ₹1,00,480. Tax at 12.5% is ₹12,560, and cess at 4% adds ₹502, taking the bill to about ₹13,062 before any surcharge.

An original online subscriber holding the same 20 units receives the same ₹2,80,480. Their cost was ₹62,660, so the gain of ₹2,17,820 is more than twice as large, and none of it is taxed.

Interest, TDS and advance tax on SGB maturity proceeds

The exemption covers only the capital gain. The 2.5% coupon, including the final instalment paid today, is taxable as income in the hands of every holder, original subscribers included.

No tax is deducted at source on SGB interest or redemption, so the bank credit does not tell the holder whether anything is owed. Exchange buyers and non-individual holders should include the maturity gain in their advance tax estimate for Tax Year 2026-27 and pay it through the remaining instalments due on 15 December 2026 and 15 March 2027, rather than leaving it to the return.

How the SGB 2018-19 Series III maturity amount is credited

The redemption amount and final coupon go to the bank account recorded with the bond at purchase; for units held in demat form, the account linked with the depository record. Where that account has since been closed or changed, the holder has to update the details with the issuing bank, SHCIL office, post office or depository participant, as set out in the RBI FAQs on the Sovereign Gold Bond Scheme; until then, the payment cannot reach the right account.

Holders who used the premature redemption window instead, either last year or in later windows, are in a different position. A premature redemption to RBI after the five-year lock-in is not a redemption on maturity, so under the amended clause it is taxable even for original subscribers, a point covered in detail in our report on the SGB 2021-22 Series VII premature redemption price.

For anyone who bought Series III units on the exchange in the past year hoping for a tax-free exit, the holding period matters most now: units bought after 13 November 2025 produce a short-term gain at slab rates, and the cost and date of each purchase should be pulled from the contract notes before the 15 December 2026 advance tax instalment.

Official source: View the official source document