RBI Announces Premature Redemption Price for SGB 2021
May 30, 2026
RBI sets SGB 2021-22 Series II premature redemption price at Rs 15672 offering investors an absolute return of 227 percent on June 1
Gold prices declined on May 29, driven by a cooling of geopolitical tensions, as fresh hopes of a US-Iran ceasefire extension prompted investors to pull away from safe-haven buying.
Despite the recent decline, investors who hold gold in their portfolio have received strong returns in 2026. Gold prices have increased by nearly 17 per cent in 2026. Amid the price rise, Sovereign Gold Bond (SGB) investors have gained significantly as the price of the bond is linked directly to the price of physical gold.
SGB 2021-22 Series-II Premature Redemption Date
Investors who hold SGB 2021-22 Series-II units are set to get an opportunity to redeem their holdings amid the 17 per cent surge on June 1. The Reserve Bank of India (RBI) has fixed June 1 as the date for premature redemption of SGB 2021-22 Series-II.
Investors who hold the SGB 2021-22 Series-II can prematurely redeem their investments as RBI’s rules allow premature redemption of SGBs post the fifth year from the date of the issue of gold bonds on a date on which interest is payable.
How Much Will SGB 2021-22 Series II Gain
Investors can prematurely redeem their SGB 2021-22 Series II holdings at a price of Rs 15,672 per unit. Notably, the SGB 2021-22 Series II tranche was issued at Rs 4,792 per gram for investors who purchased the bond online. On the other hand, the price was fixed at Rs 4,842 for investors who purchased the SGBs offline.
Based on the redemption price set by the RBI, investors are set to get an absolute return of 227 per cent on June 1 if they prematurely redeem their holdings. Thus, investors who purchased SGBs online are set to make gains of Rs 10,880 per unit, and investors who purchased SGBs offline are set to make gains of Rs 10,830.
How Is The Premature Redemption Price Calculated
The premature redemption price for Sovereign Gold Bonds is determined by calculating the simple average of the closing prices of 999 purity gold published by the India Bullion and Jewellers Association (IBJA). Prices from the three working days before the redemption date are used for calculating the simple average.
For SGB 2021-22 Series II, the premature redemption price was determined on the basis of the simple average of the closing prices on May 26, May 27, and May 29, 2026.
Apart from the returns earned upon redemption or premature redemption, SGB investors also receive interest at the fixed rate of 2.50 per cent per annum. However, this interest is credited semi-annually to the bank account of an investor and remains taxable according to the individual income tax slab rates.
Crucial Tax Rules For SGB Investors
The Union Budget 2026 has introduced strict amendments to taxation rules for SGBs, which investors must track. In the Union Budget, the government restricted the 100 per cent capital gains tax exemption. Following the amendment, the tax-free benefit is only available for original subscribers who purchased the bonds from the RBI and hold them for the full eight-year tenure until maturity.
On the other hand, investors who will book profits during the premature redemption window will lose out on this tax exemption.
Notably, the new tax rules apply to transactions executed on or after April 1, 2026. As the June 1 premature redemption window for this tranche falls after this implementation date, original investors who choose to book profits early will lose out on their capital gains tax exemption.
Following the amendment, premature redemptions or sales on secondary exchanges will attract standard capital gains tax based on the holding timeline. If the holding duration is more than 12 months, the investors will be taxed a flat long-term capital gains (LTCG) tax of 12.5 per cent without any indexation benefits. Short-term capital gains for investments held under 12 months will be added to total income and taxed at individual tax slab rates. Additionally, secondary market buyers who bought the SGBs via stock exchanges will not be eligible for the tax exemption.
Despite the recent decline, investors who hold gold in their portfolio have received strong returns in 2026. Gold prices have increased by nearly 17 per cent in 2026. Amid the price rise, Sovereign Gold Bond (SGB) investors have gained significantly as the price of the bond is linked directly to the price of physical gold.
SGB 2021-22 Series-II Premature Redemption Date
Investors who hold SGB 2021-22 Series-II units are set to get an opportunity to redeem their holdings amid the 17 per cent surge on June 1. The Reserve Bank of India (RBI) has fixed June 1 as the date for premature redemption of SGB 2021-22 Series-II.
Investors who hold the SGB 2021-22 Series-II can prematurely redeem their investments as RBI’s rules allow premature redemption of SGBs post the fifth year from the date of the issue of gold bonds on a date on which interest is payable.
How Much Will SGB 2021-22 Series II Gain
Investors can prematurely redeem their SGB 2021-22 Series II holdings at a price of Rs 15,672 per unit. Notably, the SGB 2021-22 Series II tranche was issued at Rs 4,792 per gram for investors who purchased the bond online. On the other hand, the price was fixed at Rs 4,842 for investors who purchased the SGBs offline.
Based on the redemption price set by the RBI, investors are set to get an absolute return of 227 per cent on June 1 if they prematurely redeem their holdings. Thus, investors who purchased SGBs online are set to make gains of Rs 10,880 per unit, and investors who purchased SGBs offline are set to make gains of Rs 10,830.
How Is The Premature Redemption Price Calculated
The premature redemption price for Sovereign Gold Bonds is determined by calculating the simple average of the closing prices of 999 purity gold published by the India Bullion and Jewellers Association (IBJA). Prices from the three working days before the redemption date are used for calculating the simple average.
For SGB 2021-22 Series II, the premature redemption price was determined on the basis of the simple average of the closing prices on May 26, May 27, and May 29, 2026.
Apart from the returns earned upon redemption or premature redemption, SGB investors also receive interest at the fixed rate of 2.50 per cent per annum. However, this interest is credited semi-annually to the bank account of an investor and remains taxable according to the individual income tax slab rates.
Crucial Tax Rules For SGB Investors
The Union Budget 2026 has introduced strict amendments to taxation rules for SGBs, which investors must track. In the Union Budget, the government restricted the 100 per cent capital gains tax exemption. Following the amendment, the tax-free benefit is only available for original subscribers who purchased the bonds from the RBI and hold them for the full eight-year tenure until maturity.
On the other hand, investors who will book profits during the premature redemption window will lose out on this tax exemption.
Notably, the new tax rules apply to transactions executed on or after April 1, 2026. As the June 1 premature redemption window for this tranche falls after this implementation date, original investors who choose to book profits early will lose out on their capital gains tax exemption.
Following the amendment, premature redemptions or sales on secondary exchanges will attract standard capital gains tax based on the holding timeline. If the holding duration is more than 12 months, the investors will be taxed a flat long-term capital gains (LTCG) tax of 12.5 per cent without any indexation benefits. Short-term capital gains for investments held under 12 months will be added to total income and taxed at individual tax slab rates. Additionally, secondary market buyers who bought the SGBs via stock exchanges will not be eligible for the tax exemption.