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The RBI has opened premature redemption window for sovereign gold bonds (SGBs) under the 2020-21 Series-VII tranche today; will tax apply if you exit today?
SGBs 2020-21 Series-VII: The redemption price for the tranche has been fixed at Rs 15,254 per unit, offering a 201.99% gain over the original issue price of Rs 5,051.
The Reserve Bank of India (RBI) has opened the premature redemption window for sovereign gold bonds (SGBs) under the 2020-21 Series-VII tranche today, April 20, 2026. The redemption price for the tranche has been fixed at Rs 15,254 per unit, offering a 201.99% gain over the original issue price of Rs 5,051.
“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.
With SGB investors looking to book profits after a sharp rise in gold prices over the past few years, one key question remains: Will tax apply if you exit today?
SBG Premature Redemption: Will You Pay Tax If You Redeem Today?
According to experts, investors who originally subscribed to the bond during the RBI issue and are redeeming through the official RBI premature redemption route after the lock-in period can continue to enjoy capital gains tax exemption.
Aditya Bhattacharya, partner at King Stubb & Kasiva, Advocates and Attorneys, said, “The Union Budget 2026 has adjusted the tax benefits, making them less straightforward than before. If you’re an original investor who bought SGBs directly from the RBI and hold them until the official redemption (like the premature window for the 2020-21 Series VII after five years), your capital gains are still tax-free. But if you bought them on the secondary market or sell early outside RBI channels, taxes might apply now.”
Finance Minister Nirmala Sitharaman, in her Budget Speech 2026, said, “It is proposed to provide that the exemption from capital gains tax in respect of Sovereign Gold Bonds shall be available only where such bonds are subscribed to by an individual at the time of original issue and are held continuously until redemption on maturity. It is also proposed to provide that this exemption applies uniformly to all issuances of Sovereign Gold Bonds by the Reserve Bank of India.”
What If You Sell SGBs On Exchange?
If investors sell Sovereign Gold Bonds on stock exchanges instead of redeeming with the RBI, capital gains tax rules applicable to listed securities may apply.
Long-term capital gains after the specified holding period may attract tax at applicable rates, while short-term gains may be taxed as per the investor’s slab, depending on prevailing law.
Interest Income Is Taxable
Apart from capital gains, investors should note that the fixed 2.5 per cent annual interest paid on Sovereign Gold Bonds is taxable as income. The interest is credited semi-annually to the investor’s registered bank account.
Why This Redemption Matters
The 2020-21 Series-VII tranche has delivered sharp returns as gold prices surged globally. Based on the redemption price of Rs 15,254, investors have gained over 200 per cent on the issue price, excluding the interest earned during the holding period.
Disclaimer:Disclaimer: The views and investment tips shared in this article are for general information purposes only. Readers are advised to consult a certified financial advisor before making any investment decisions.
April 20, 2026, 11:51 IST
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