Sovereign Gold Bonds Investors Get 205% Return As RBI Announces Early Redemption For This SGB Series
April 19, 2026
Sovereign Gold Bonds: The redemption will be permitted on April 20, and the price has been fixed at Rs 15,254 a unit, which is 205% gain over discounted issue price of Rs 5,001.
Sovereign Gold Bonds: The redemption will be permitted on April 20, and the price has been fixed at Rs 15,254 a unit, which is 205% gain over discounted issue price of Rs 5,001.
The Reserve Bank of India (RBI) has announced the premature redemption of Sovereign Gold Bonds (SGBs) under the 2020-21 Series-VII, issued on October 20, 2020.
The redemption will be permitted tomorrow, April 20, 2026, and the price has been fixed at Rs 15,254 per unit, which is a 201.99% gain over the issue price of Rs 5,051. This does not include the 2.5% annual interest income earned during the holding period.
There was also a discount of Rs 50 on online payment at the time of the SGB issuance. The gain will be 205.01% based on the issue price of Rs 5,001 after the discount.
“In terms of GOI notification F.No.4(4)-B(W&M)/2020 dated October 09, 2020 (SGB 2020-21 Series-VII-Issue date October 20, 2020) on Sovereign Gold Bond Scheme, premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the next due date of premature redemption of the above tranche shall be on April 20, 2026," the RBI said in a statement dated April 17, 2026.
The redemption price has been calculated on the basis of the simple average of closing gold prices published by the India Bullion and Jewellers Association (IBJA) for the three business days – April 15, April 16, and April 17, 2026.
According to the SGB scheme, the gold bonds shall be repayable on the expiration of eight years from the date of the issue of the bonds. However, premature redemption of the bonds may be permitted after the fifth year from the date of issue of bonds and such repayments will be made on the next interest payment date.
Tax Treatment of Sovereign Gold Bonds
Redemption On Maturity: Before the Budget 2026, capital gains on SGB maturity were fully tax-free for all investors, including those who bought from the secondary market. After the Budget 2026, this benefit is available only to investors who bought SGBs in the original issue and hold them till maturity. Secondary market buyers will now have to pay capital gains tax.
Earlier Redemption: If SGBs are sold before maturity, capital gains tax applies. Gains after more than 12 months are taxed as LTCG at 12.5%, while gains within 12 months are taxed as per the investor’s income tax slab.
However, the interest on the SGBs is taxable.
Interest Rate On SGBs
Interest on the gold bonds, at an annual fixed rate of 2.5%, is credited semi-annually to the bank account of the investors.
What Is The Sovereign Gold Bonds Scheme?
The Sovereign Gold Bond (SGB) Scheme was launched by the Government of India in November 2015 as an alternative to owning physical gold. Issued by the Reserve Bank of India (RBI) on behalf of the Centre, these bonds were denominated in grams of gold and offered investors the dual benefit of earning a fixed annual interest (2.5% on the issue price) along with capital appreciation linked to gold prices. The scheme aimed to reduce India’s dependence on imported physical gold, curb hoarding, and channel household savings into financial assets.
Why Was The SGB Scheme Discontinued?
The government discontinued fresh issuances of SGBs in October 2023, citing that the scheme had largely achieved its objectives and that the cost of managing and servicing the bonds had grown significantly. Another key factor was the availability of other gold investment avenues such as Gold ETFs and digital gold, which reduced the need for periodic SGB issuances. However, existing bonds remain valid, and investors can hold them until maturity or opt for premature redemption as per the scheme’s rules.
The Reserve Bank of India (RBI) has announced the premature redemption of Sovereign Gold Bonds (SGBs) under the 2020-21 Series-VII, issued on October 20, 2020.
The redemption will be permitted tomorrow, April 20, 2026, and the price has been fixed at Rs 15,254 per unit, which is a 201.99% gain over the issue price of Rs 5,051. This does not include the 2.5% annual interest income earned during the holding period.
There was also a discount of Rs 50 on online payment at the time of the SGB issuance. The gain will be 205.01% based on the issue price of Rs 5,001 after the discount.
“In terms of GOI notification F.No.4(4)-B(W&M)/2020 dated October 09, 2020 (SGB 2020-21 Series-VII-Issue date October 20, 2020) on Sovereign Gold Bond Scheme, premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the next due date of premature redemption of the above tranche shall be on April 20, 2026," the RBI said in a statement dated April 17, 2026.
The redemption price has been calculated on the basis of the simple average of closing gold prices published by the India Bullion and Jewellers Association (IBJA) for the three business days – April 15, April 16, and April 17, 2026.
According to the SGB scheme, the gold bonds shall be repayable on the expiration of eight years from the date of the issue of the bonds. However, premature redemption of the bonds may be permitted after the fifth year from the date of issue of bonds and such repayments will be made on the next interest payment date.
Tax Treatment of Sovereign Gold Bonds
Redemption On Maturity: Before the Budget 2026, capital gains on SGB maturity were fully tax-free for all investors, including those who bought from the secondary market. After the Budget 2026, this benefit is available only to investors who bought SGBs in the original issue and hold them till maturity. Secondary market buyers will now have to pay capital gains tax.
Earlier Redemption: If SGBs are sold before maturity, capital gains tax applies. Gains after more than 12 months are taxed as LTCG at 12.5%, while gains within 12 months are taxed as per the investor’s income tax slab.
However, the interest on the SGBs is taxable.
Interest Rate On SGBs
Interest on the gold bonds, at an annual fixed rate of 2.5%, is credited semi-annually to the bank account of the investors.
What Is The Sovereign Gold Bonds Scheme?
The Sovereign Gold Bond (SGB) Scheme was launched by the Government of India in November 2015 as an alternative to owning physical gold. Issued by the Reserve Bank of India (RBI) on behalf of the Centre, these bonds were denominated in grams of gold and offered investors the dual benefit of earning a fixed annual interest (2.5% on the issue price) along with capital appreciation linked to gold prices. The scheme aimed to reduce India’s dependence on imported physical gold, curb hoarding, and channel household savings into financial assets.
Why Was The SGB Scheme Discontinued?
The government discontinued fresh issuances of SGBs in October 2023, citing that the scheme had largely achieved its objectives and that the cost of managing and servicing the bonds had grown significantly. Another key factor was the availability of other gold investment avenues such as Gold ETFs and digital gold, which reduced the need for periodic SGB issuances. However, existing bonds remain valid, and investors can hold them until maturity or opt for premature redemption as per the scheme’s rules.