Sovereign Gold Bond Early Redemption: The Dates, How RBI Sets the Price, and the Tax

A Sovereign Gold Bond is meant to be held for eight years, but most holders do not have to wait that long. From the fifth year the RBI buys bonds back on each interest date, every six months, at the going price of gold. With gold near record levels, many holders of the 2019 and 2020 series are weighing the next window. The bond pays back almost four times its 2019 issue price. What has changed is the tax. Since 1 April 2026 the gain on an early redemption is taxed at 12.5%, where it used to be free. This guide sets out when your dates fall, how the RBI fixes the price, how to apply, and what the tax change means for the choice between leaving now and holding on.

Written on 29 October 2026. The dates and prices are from the RBI's own redemption notices for each series, which quote the Government notification behind it; the procedure is from the RBI's FAQ on the scheme. The tax is from sections 2, 70 and 197 of the Income-tax Act, 2025, read on the Income Tax Department's site. The worked example uses one series' real figures; its assumptions are stated. This explains the rules; it is not advice to redeem or to hold.

When you can redeem early

Every RBI notice repeats the rule from the Government notification for the series: early redemption "may be permitted after fifth year from the date of issue … on the date on which interest is payable". Interest is paid every six months from the issue date, so each series has two dates a year. A bond issued on 15 October 2019 can be redeemed early on 15 April and 15 October, from October 2024 until it matures on 15 October 2027.

Your own dates follow from the issue date printed on your Certificate of Holding, or from the dates your interest is credited. These are the next dates for the series the RBI redeemed between July and October 2026:

The dates are the issue day of the month, six months apart. Where one falls on a holiday, the RBI's notice for that series gives the date it actually uses. The 2018-19 Series VI bond has no early date left: February 2027 is its maturity, when every holder is paid out.

How the RBI sets the redemption price

The price is not set by the RBI's view of gold. Each notice says it is the "simple average of closing price of gold of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association". One unit is one gram, so the price is per gram. The RBI announces it shortly before the date, usually on the last business day before it. These are its notices from July to October 2026:

Two things follow. First, you apply without knowing the price. The request closes a day before the date, and the three days that set the price run up to that day, so the price is fixed only after you have committed. Second, every series redeemed on a given date gets the same price, whatever it cost at issue. A year earlier, on 15 October 2025, the same 2019-20 Series V was redeemed at ₹12,394, so the October 2026 price was 18.8% higher.

How to apply

1. Go through the bank, post office, Stock Holding Corporation (SHCIL) office or agent you bought from. The RBI's FAQ says these agencies handle early redemption, as they do nomination and changes of address. If your bonds are in a demat account, ask your broker how it takes the request, since the RBI's FAQ does not set out that route.
2. Time it. You can apply from 30 days before the interest date, and the request "can only be entertained" if it reaches them at least one day before.
3. Check the bank account on record. The money goes to the account you gave when you bought the bond. If it has changed, tell the agency first.
4. The money arrives on the redemption date, at the price in the RBI's notice.

If you hold the bond in demat form you have a second exit at any time: sell it on the stock exchange. The price there is whatever buyers pay, which can be below or above the RBI's gold price. The RBI's window pays the full IBJA average, with no brokerage.

The tax: what the Finance Act, 2026 changed

Until 31 March 2026, an individual paid no capital gains tax on a redemption, at maturity or in an early window. The Income-tax Act, 2025, as amended by the Finance Act, 2026, now exempts a redemption in section 70(x) only "if held by an individual from the date of original issue till maturity". Everything else is a taxable transfer:

There is no indexation on any of these. The 2.5% interest is taxed separately, every year, at your slab rate as income from other sources, and no tax is deducted at source on it. One warning: the RBI's FAQ still says the gain on redemption "has been exempted" and that indexation is available. Both statements describe the old law. Since 1 April 2026 the exemption is narrower, and indexation went for these gains in July 2024.

The words "held by an individual from the date of original issue" also raise a question for heirs. Read literally, they do not cover a bond that passed to a nominee or legal heir on the holder's death, and the law has no special provision for that case. Until the department clarifies it, an heir should not assume the exemption.

A worked example: one more year, or leave now?

Take 10 grams of SGB 2019-20 Series V, bought at issue in October 2019 at ₹3,788 a gram, the price for applications not made and paid online. The October 2026 window paid ₹14,725 a gram, and the bond matures in October 2027.

Holding to October 2027 would make the whole maturity payment tax-free for this first buyer, and add one more year's interest. So the question is how far gold would have to fall in a year before leaving now was the better choice:

• Counting only the tax. At maturity the 10 grams would need to fetch less than about ₹13,240 a gram, a fall of about 10% from ₹14,725, before the early exit came out ahead. The extra year's interest is counted after 30% slab tax.
• Counting what the cash could earn. If the ₹1,33,032 went into a one-year bank deposit at 6.25%, SBI's rate for one to two years, taxed at the 30% slab, it would earn about ₹5,720 after tax. Then the break-even fall is about 6%, a maturity price near ₹13,810.

That is arithmetic, not a forecast of gold. For an online applicant who paid ₹3,738 a gram, the figures shift slightly: the tax per gram is ₹1,428 instead of ₹1,422.

Redeem early, hold, or sell on the exchange?

The right exit depends on how you came to hold the bond:

• You bought at issue and are near maturity. Leaving early now costs the 12.5% tax that waiting would avoid. The case for waiting is the exemption. The case against is that the gold price over the remaining months is unknown.
• You bought on the exchange. You will be taxed at maturity anyway, so the tax is the same whenever you leave. The RBI's window pays the full IBJA average, which can beat a sale on the exchange at a discount.
• You need cash but want to keep the bond. The RBI's FAQ says the bonds can be pledged for a loan from a bank, financial institution or NBFC, at the same loan-to-value ratio as an ordinary gold loan. Whether to lend is the lender's decision.
• The bond came to you as a nominee or heir. The cost and holding period of the earlier holder carry over under section 73. Whether the exemption at maturity applies is not settled, as above.

For the other ways to own gold, from jewellery to ETFs, and what each costs to buy and sell, see the gold buying guide. No new Sovereign Gold Bond has been issued since Series IV of 2023-24 in February 2024, so the only way to buy one now is on the exchange.

Frequently Asked Questions

When can I redeem a Sovereign Gold Bond early? After the fifth year from its issue date, on any interest date, which comes every six months. A bond issued on 15 October 2019 can be redeemed early on 15 April or 15 October from October 2024 until it matures in October 2027.

How is the SGB premature redemption price calculated? It is the simple average of the IBJA's closing price for 999 gold over the three business days before the redemption date. The RBI publishes it shortly before the date. For 15 October 2026 it was ₹14,725 a unit.

How do I apply for SGB premature redemption? Through the bank, post office, SHCIL office or agent you bought from, from 30 days before the interest date and at least one day before it. If your bonds are in demat form, ask your broker how it takes the request. The money goes to the bank account on record.

Is SGB premature redemption taxable? Yes, since 1 April 2026. Section 70(x) of the Income-tax Act, 2025 exempts a redemption only if an individual held the bond from its original issue until maturity. An early redemption is a long-term capital gain, taxed at 12.5% plus 4% cess, with no indexation.

Is the gain at maturity still tax-free? Only for an individual who held the bond from the date of original issue. A bond bought on the stock exchange is taxed at 12.5% plus cess even at maturity.

Is the interest on Sovereign Gold Bonds taxable? Yes. The 2.5% a year is taxed at your slab rate every year, as income from other sources. No tax is deducted at source on it.

Can I sell a Sovereign Gold Bond before five years? Yes, if it is in a demat account, on the stock exchange at the price buyers pay. Held for 12 months or less the gain is taxed at your slab rate, and after that at 12.5% plus cess.

Can I still buy new Sovereign Gold Bonds? No. The last issue was Series IV of 2023-24 in February 2024. Existing bonds can be bought from other holders on the stock exchange.

Can I take a loan against Sovereign Gold Bonds? Yes. The RBI's FAQ says they can be used as collateral with banks, financial institutions and NBFCs, at the loan-to-value ratio for gold loans, at the lender's discretion.

Dates and prices are as published by the RBI to 29 October 2026, and the tax as in force for tax year 2026-27. The RBI publishes each new price shortly before its date. This explains the rules; it is not advice to redeem, hold or sell any bond.