The Reserve Bank of India (RBI) has announced the redemption schedule for eight eligible SGB tranches, allowing investors to redeem their bonds before the full eight-year maturity. However, early redemption is permitted only on specified interest payment dates, and investors must submit their requests within the prescribed application window.
The July schedule is one of the busiest this year, with eight SGB series becoming eligible for early exit.
The eligible tranches are:
- SGB 2019-20 Series VIII: Redemption on July 21, 2026; applications accepted from June 20 to July 13.
- SGB 2020-21 Series I: Redemption on July 28, 2026; applications accepted from June 27 to July 20.
- SGB 2020-21 Series II: Redemption on July 29, 2026; applications accepted from June 28 to July 21.
- SGB 2020-21 Series III: Redemption on July 30, 2026; applications accepted from June 29 to July 22.
- SGB 2020-21 Series IV: Redemption on July 31, 2026; applications accepted from June 30 to July 23.
- SGB 2021-22 Series I, II and III: All three will be redeemed on July 31, 2026, with applications accepted from June 30 to July 23.
Investors must submit redemption requests through the bank, post office, depository participant, stock holding agent or the RBI Retail Direct platform through which they purchased the bonds. Missing the application window means waiting until the next eligible interest payment date or until the bonds mature after eight years.
How is the redemption price calculated?
The redemption value is not linked to the issue price of the bond.
Instead, the RBI calculates the redemption price using the simple average of the closing price of 999-purity gold during the previous three business days, based on rates published by the India Bullion and Jewellers Association. The central bank announces the final redemption price shortly before each redemption date.
Apart from any gains linked to gold prices, SGB investors also earn 2.5% annual interest, paid semi-annually on the original investment amount throughout the bond’s tenure.
Gold’s rally has boosted investor returns
The recent redemption of SGB 2020-21 Series III illustrates how much investors have benefited from the sharp rise in gold prices.
The bond was issued at ₹4,627 per gram for online subscribers (₹4,677 per gram for offline investors) and was redeemed on June 16, 2026, at ₹14,774 per gram.
That works out to an absolute return of around 219% for online investors, excluding the semi-annual interest payments. An investment of ₹1 lakh at the time of issuance would have grown to roughly ₹3.19 lakh, in addition to the interest earned over five years.
Tax rules have changed
Investors should also keep the revised tax rules in mind before deciding whether to redeem their bonds.
Under the provisions effective from April 1, 2026, the capital gains tax exemption on redemption is available only to investors who subscribed to SGBs in the RBI’s primary issuances and hold them until maturity.
Investors who bought Sovereign Gold Bonds from the secondary market will now have to pay the applicable capital gains tax on redemption, marking a significant change from the earlier tax regime.
With several SGB tranches opening for early redemption in July, investors should check whether their bond series is eligible, ensure they do not miss the application deadline and evaluate whether booking gains now aligns with their overall investment and tax planning strategy.
