The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond (SGB) 2021-22 Series-II. Investors holding this tranche can opt for premature redemption starting June 1, 2026.
The redemption price has been fixed at ₹15,672 per gram based on prevailing gold prices. This update highlights both the capital appreciation achieved and changing tax treatment for such investments.
The RBI has set the premature redemption price at ₹15,672 per gram for SGB 2021-22 Series-II. This price is calculated using the simple average of closing gold prices for the last 3 business days before redemption.
The valuation is based on 999 purity gold rates published by the India Bullion and Jewellers Association (IBJA). This ensures that the redemption value remains closely aligned with prevailing market prices.
Premature redemption of SGBs is permitted after 5 years from the issue date as per RBI guidelines. The SGB 2021-22 Series-II was issued on June 1, 2021, making June 1, 2026, the first eligible redemption date.
However, redemption can only be exercised on scheduled interest payment dates. This structure ensures consistency with the bond’s semi-annual interest payout cycle.
The bond was originally issued at ₹4,792 per gram for online investors. Based on the redemption price of ₹15,672, the absolute gain per gram stands at ₹10,880.
The percentage return works out to 227.05%, calculated as (₹15,672 – ₹4,792) ÷ ₹4,792 × 100. This return excludes the additional 2.5% annual interest paid semi-annually during the holding period.
An investment of ₹1,00,000 at the time of issuance would grow to approximately ₹3,27,000 based on the redemption price. This calculation does not include the cumulative interest income earned over the years.
From April 1, 2026, tax rules for SGBs have been revised, impacting investor returns. Capital gains tax now applies on premature redemption, while full tax exemption is limited to original subscribers holding until maturity.
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The RBI’s announcement of ₹15,672 as the premature redemption price reflects a sharp rise in gold prices over the past 5 years. Investors in SGB 2021-22 Series-II have benefited from both capital appreciation and fixed interest income.
The option for premature redemption provides liquidity but comes with updated tax implications. Overall, the development highlights the evolving nature of returns and taxation in gold-linked investment instruments.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jun 1, 2026, 10:54 AM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and mutual funds, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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