The Reserve Bank of India has officially announced the premature redemption price at ₹15,512 per unit for Sovereign Gold Bond (SGB) 2021-22 Series III, confirming the redemption window that opened on June 8, 2026. As per RBI notification, holders of SGB 2021-22 Series III will be eligible for premature redemption from this date, with the bonds originally issued on June 8, 2021. The redemption amount is calculated using the simple average of the closing price of gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) during the three working days preceding the redemption date. This price represents a significant appreciation from the original issue price of ₹4,839 per gram for online subscribers and ₹4,889 for offline applicants, with a ₹50 per gram discount extended to digital subscribers.
The redemption amount will be calculated using a specific formula linked to prevailing gold prices. As reported by RBI rules, the value payable to investors is calculated using the simple average of the closing price of gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) during the three working days preceding the redemption date. The central bank announces the redemption price separately before the payout is processed, ensuring transparency in the calculation method. For the June 8, 2026 redemption, the RBI has set the premature redemption price at ₹15,512 per gram, representing a significant appreciation from the original issue price of ₹4,889 per gram.
The redemption window comes at a time when domestic gold prices are trading substantially above levels seen in 2021, when this tranche was offered. Against the online issue price of ₹4,839 per gram, the redemption price of ₹15,512 today represents an absolute gain of ₹10,673 per unit, translating to a 220.56% return for online subscribers. For an investor who put ₹1 lakh online at ₹4,839 per gram, the rough calculations show 20.67 grams of gold units received at the redemption price of ₹15,512 per gram, resulting in a redemption value of ₹3.20 lakh. Including the 2.5% annual interest earned for 5 years of approximately ₹12,500, the total value reaches approximately ₹3.33 lakh, representing around 220% capital gain in 5 years, excluding interest. This tranche is considered one of the strongest in the June 2026 redemption calendar, with the capital appreciation from the original issue price of ₹3,196 per gram being around 385%.
The tax treatment of SGBs has changed significantly from April 1, 2026, with substantial implications for investors. Under the revised framework, capital gains exemption is available only to investors who subscribed to the bond at the original issue and hold it until final maturity. Premature redemption after the five-year lock-in period no longer qualifies for this exemption, meaning original subscribers redeeming today will have to pay long-term capital gains (LTCG) tax on their gains. The exemption at maturity will apply only to original subscribers who purchased the bonds directly in the primary issue and hold them until redemption in 2029. Investors who bought SGBs from the secondary market are not eligible for the maturity exemption, with their gains remaining taxable regardless of redemption timing. Over and above capital appreciation, SGB investors earn interest at 2.5% per annum on the initial investment amount, credited semi-annually, though this interest income is taxable as income from other sources at the investor's applicable slab rate.
Sovereign Gold Bonds were introduced as an alternative to physical gold ownership and are denominated in grams of gold, meaning their value moves in line with gold prices. The bonds offer investors a convenient option for long-term exposure to the precious metal without requiring storage or safeguarding of physical gold. For bondholders in the June 2021 tranche, the latest RBI notification marks the first opportunity to redeem their investment directly with the government after completing five years in the scheme. However, the RBI has not announced any new SGB issuance calendar for FY 2026-27, with the last issued tranche being SGB 2023-24 Series IV in February 2024. This pause in fresh SGB issuances means existing SGBs continue as usual, but new investors do not have fresh tranches to apply for, changing the investment landscape for gold investors.
