SGB Redemption & Returns Calculator
Calculate Sovereign Gold Bond (SGB) premature exit and 8-year maturity payouts based on official RBI redemption prices, 2.50% semi-annual interest, and Section 47(viic) 100% tax exemption.
Sovereign Gold Bond (SGB) Redemption & Returns Calculator
Calculate premature exit and 8-year maturity payouts based on official RBI redemption prices, 2.50% interest, and zero capital gains tax
SGB 2020-21 Series VII (2020-21)
Issue Price: ₹₹5,051/g • Official RBI Rate: ₹₹14,614/g • Coupon: 2.5% p.a.✓ Premature Redemption Notification: October 19, 2026
1 Unit = 1 Gram of 999 purity 24-karat gold
Under Section 47(viic) of the Income Tax Act, 1961, any capital gains arising on redemption of Sovereign Gold Bonds by an individual through the RBI window are completely exempt from tax. No LTCG or STCG applies.
What is SGB Redemption and How Are Returns Calculated?
SGB Redemption is the statutory settlement process where the Reserve Bank of India repays Sovereign Gold Bond investors based on the 3-day simple average of 999 purity gold prices published by the India Bullion and Jewellers Association (IBJA). Total return combines 100% tax-free capital gains under Section 47(viic) plus 2.50% annual coupon interest paid semi-annually on the initial face value.
How SGB Redemption and Returns Are Calculated (Official RBI Guidelines)
Unlike paper equities or real estate, Sovereign Gold Bond payouts are governed by precise statutory formulas issued under the Government Securities Act, 2006 and the Income Tax Act, 1961.
The RBI redemption price per gram is fixed as the simple average of the closing prices of 24-karat (999 purity) gold of the previous 3 working days from the redemption date, as certified by IBJA.
Investors receive a fixed 2.50% annual coupon credited directly to their designated bank accounts every 6 months. This interest is computed strictly on the original nominal issue price of the bond.
Under Section 47(viic) of the Income Tax Act, capital gains on redemption through the RBI window (both 5-year premature exit and 8-year final maturity) are completely exempt from tax for individuals.
Worked Example: Redeeming 10 Grams of SGB 2020-21 Series VII (October 19, 2026 Tranche)
Suppose an investor subscribed to 10 units (10 grams) of SGB 2020-21 Series VII on October 20, 2020, and tenders them for premature redemption during the official RBI window in October 2026.
Master SGB Tranches & 2026 RBI Redemption Rates
The table below lists historical Sovereign Gold Bond tranches reaching their 5-year premature exit and 8-year final maturity milestones in 2026, comparing original issue prices against officially notified RBI redemption rates.
| SGB Tranche Series | Issue Date | Issue Price | 2026 RBI Redemption Rate | Capital Gain (per gram) | Redemption Status |
|---|---|---|---|---|---|
| SGB 2020-21 Series VII | Oct 20, 2020 | ₹5,051/g | ₹14,614/g | +₹9,563/g (+189%) | Active (Oct 19, 2026) |
| SGB 2019-20 Series V | Oct 15, 2019 | ₹3,799/g | ₹14,725/g | +₹10,926/g (+287%) | Active (Oct 15, 2026) |
| SGB 2018-19 Series VI | Nov 06, 2018 | ₹3,146/g | ₹15,102/g | +₹11,956/g (+380%) | Matured (8 Years) |
| SGB 2021-22 Series VI | Sep 07, 2021 | ₹4,791/g | ₹15,334/g | +₹10,543/g (+220%) | Premature Window |
| SGB 2018-19 Series IV | Jul 03, 2018 | ₹3,119/g | ₹14,086/g | +₹10,967/g (+351%) | Matured (8 Years) |
Common Questions & Answers (English & हिंदी)
Clear answers to common questions in your preferred language.
Frequently Asked Questions (SGB Redemption & Tax Rules)
How does the RBI calculate the SGB redemption price for premature and final exit?
Under Reserve Bank of India (RBI) operational guidelines, the redemption price of Sovereign Gold Bonds is calculated based on the simple average of the closing prices of 999 purity (24-karat) gold for the previous 3 business days preceding the redemption due date, as officially published by the India Bullion and Jewellers Association Limited (IBJA).
Is capital gains tax applicable when redeeming Sovereign Gold Bonds through RBI?
No. Under Section 47(viic) of the Income Tax Act, 1961, any capital gains arising on redemption of Sovereign Gold Bonds by an individual investor are 100% exempt from income tax. Whether you redeem after the 5th year through the RBI premature redemption window or at the end of the full 8-year maturity, you pay zero Long-Term Capital Gains (LTCG) tax.
Is SGB semi-annual interest (2.50% p.a.) taxable?
Yes. While capital gains on RBI redemption are 100% tax-free, the 2.50% annual coupon interest (credited semi-annually directly to your bank account) is classified as "Income from Other Sources" and is taxable at your applicable personal income tax slab rate. However, no TDS (Tax Deducted at Source) is deducted by banks or RBI on SGB interest payouts.
What is the difference between redeeming via RBI vs selling SGB on the stock exchange?
Redeeming directly via the RBI window provides two massive advantages: (1) You receive the full 3-day average IBJA gold price without any broker haircut or liquidity discount, and (2) Capital gains are 100% tax-free under Section 47(viic). In contrast, selling SGB units on NSE/BSE secondary markets is treated as a transfer, making your capital gains subject to 12.5% LTCG tax under Section 112, in addition to secondary market liquidity discounts.
When can an investor prematurely redeem Sovereign Gold Bonds?
Premature redemption of Sovereign Gold Bonds is permitted after the completion of 5 years from the date of issue. The redemption request can be submitted during specific application windows announced by the RBI ahead of each semi-annual interest payment date through your issuing bank, post office, SHCIL, or demat broker.
Why do Sovereign Gold Bonds generate higher returns than Physical Gold or Gold ETFs?
SGBs outperform physical gold and gold ETFs due to three factors: (1) SGB offers an additional 2.50% annual cash interest payout on the initial issue price, (2) Capital gains upon redemption with the RBI are completely tax-exempt (whereas physical gold and ETFs attract 12.5% LTCG tax), and (3) SGB carries zero making charges, zero storage expenses, and zero GST on purchase.