The Reserve Bank of India (RBI) has fixed the premature redemption price of Sovereign Gold Bond (SGB) 2021-22 Series VII at ₹14,167 per gram, allowing eligible investors to exit the investment from November 2, 2026. The tranche was originally issued on November 2, 2021, at ₹4,765 per gram, with a discounted price of ₹4,715 for investors who applied online and paid digitally.
At the revised redemption price, investors who purchased the bonds at the discounted online issue price will earn a capital appreciation of approximately 200.47%, excluding interest income. Those who paid the regular issue price will receive an appreciation of approximately 197.31%. However, the exit comes with an important tax consideration: changes effective April 1, 2026, mean that premature SGB redemption is no longer eligible for the capital gains tax exemption available under the earlier rules.
Key Takeaways
- RBI has fixed the premature redemption price at ₹14,167 per gram for SGB 2021-22 Series VII.
- Eligible investors can redeem the bonds from November 2, 2026, after completing five years.
- The original issue price was ₹4,765 per gram, reduced to ₹4,715 for eligible online subscribers.
- Online subscribers will see approximately 200.47% capital appreciation, excluding interest.
- Regular-price subscribers will see approximately 197.31% capital appreciation.
- SGBs pay fixed interest of 2.5% annually on the nominal investment amount.
- Premature redemption is taxable under the revised rules effective April 1, 2026.
- The redemption price is calculated using the average closing price of 999-purity gold over the previous three business days.
RBI Fixes SGB Redemption Price at ₹14,167
The RBI announced the redemption price on October 30, 2026, for investors holding the 2021-22 Series VII tranche.
The bonds were originally issued on November 2, 2021. Under the Sovereign Gold Bond Scheme, investors can request premature redemption after completing five years from the issue date, but only on designated interest-payment dates.
The November 2, 2026 redemption date marks the completion of this five-year period.
The RBI calculated the redemption price using the simple average of the closing prices of 999-purity gold published by the India Bullion and Jewellers Association (IBJA) for the three preceding business days.
| Pricing detail | Value |
|---|---|
| Original issue date | November 2, 2021 |
| Premature redemption date | November 2, 2026 |
| Original issue price | ₹4,765 per gram |
| Online discounted issue price | ₹4,715 per gram |
| Redemption price | ₹14,167 per gram |
| Gold-price reference dates | October 28, 29 and 30, 2026 |
The redemption price is linked to the market value of gold rather than a predetermined fixed amount. This allows investors to receive a value reflecting gold-price movements during the holding period.
How Much Profit Will SGB Investors Make?
The investment return differs slightly depending on whether an investor purchased the bonds at the regular issue price or received the online payment discount.
The government offered a ₹50-per-gram discount to investors who applied online and paid through digital mode in October 2021.
The calculation is as follows:
| Particulars | Regular subscription | Online subscription |
|---|---|---|
| Purchase price per gram | ₹4,765 | ₹4,715 |
| Redemption price per gram | ₹14,167 | ₹14,167 |
| Capital gain per gram | ₹9,402 | ₹9,452 |
| Absolute capital appreciation | 197.31% | 200.47% |
These figures represent price appreciation only. They do not include the interest received during the investment period or any applicable taxes.
Example: What Happens to a ₹1 Lakh Investment?
Consider an investor who subscribed to the SGB tranche at the discounted online price.
An initial investment of ₹1 lakh would have purchased approximately 21.21 grams of gold bonds.
At the redemption price of ₹14,167 per gram, the investment would be worth approximately ₹3 lakh.
| Investment calculation | Approximate amount |
|---|---|
| Initial investment | ₹1,00,000 |
| Value at redemption | ₹3,00,360 |
| Capital gain | ₹2,00,360 |
| Price appreciation | 200.47% |
This illustration excludes interest income, taxes and any transaction-related charges. Actual figures depend on the number of units held and the original purchase price.
Investors Also Earned 2.5% Annual Interest
One of the important features of Sovereign Gold Bonds is that they provide returns through two separate components:
- Appreciation in the market-linked redemption value of gold.
- Fixed annual interest of 2.5% on the nominal investment amount.
The interest is paid twice a year directly into the investor’s registered bank account.
For example, an investor holding 10 grams of the Series VII bonds at the original nominal issue price of ₹4,765 per gram would have an initial nominal investment of ₹47,650.
The annual interest at 2.5% would be approximately ₹1,191.25.
Over five full years, the interest would amount to approximately ₹5,956.25, assuming all scheduled payments were received and the bonds were held throughout the period.
The final interest payment is made along with the redemption proceeds.
Interest income is taxable according to the investor’s applicable income-tax slab. Therefore, the overall return from SGBs includes both capital appreciation and interest, but the two components have different tax treatments.
How Is the SGB Redemption Price Calculated?
The RBI does not simply use the gold price on the redemption date.
Instead, it follows a specified calculation method based on the simple average of the closing prices of 999-purity gold for the previous three business days, as published by IBJA.
For the November 2, 2026 redemption, the reference dates were:
- October 28, 2026
- October 29, 2026
- October 30, 2026
The average of the three closing prices determined the final redemption value of ₹14,167 per gram.
This formula provides a consistent benchmark for calculating the redemption value across eligible SGB investors.
New SGB Tax Rules Make Premature Redemption Taxable
Investors considering redemption should pay particular attention to the tax changes introduced in Budget 2026.
Earlier, capital gains arising from redemption of Sovereign Gold Bonds were exempt for individual investors under the applicable rules.
However, the exemption was narrowed with effect from April 1, 2026.
Under the revised provision, the capital gains exemption is available only when an individual:
- Subscribed to the SGB at the time of its original issue.
- Held the bond continuously.
- Redeemed it upon its scheduled maturity.
This means premature redemption is taxable even if the investor originally subscribed to the bond and held it for the full five-year lock-in period.
Investors who purchased SGBs through the stock exchange or secondary market also do not qualify for the exemption, even if they hold the bonds until scheduled maturity.
| Investor situation | Capital gains tax treatment under revised rules |
|---|---|
| Original subscriber holding continuously until scheduled maturity | Exempt |
| Original subscriber choosing premature redemption | Taxable |
| Investor purchasing from secondary market and holding until maturity | Taxable |
| Secondary-market investor redeeming prematurely | Taxable |
For investors redeeming this tranche in November 2026, the gains will therefore be subject to the applicable capital gains tax provisions. The precise tax calculation depends on the investor’s acquisition date, purchase price and applicable classification of the gain.
The fixed 2.5% interest income remains taxable separately according to the investor’s income-tax slab.
Should Investors Redeem or Hold Until Maturity?
The November 2 redemption opportunity gives eligible investors an option to exit after five years. However, the redemption decision depends on individual financial goals rather than the percentage gain alone.
Investors may consider several factors:
1. Tax impact
Premature redemption is taxable under the revised rules. Investors should calculate the post-tax return rather than relying only on the headline 200% appreciation.
2. Future gold-price expectations
SGB redemption values remain linked to gold prices. Investors who expect gold prices to increase further may prefer to retain exposure, although future price movements are uncertain.
3. Interest income
The bonds continue to pay 2.5% annual interest on the nominal investment amount. Holding until maturity allows investors to receive the remaining scheduled interest payments.
4. Liquidity requirements
Investors who need money for another financial goal may prefer to use the premature redemption facility rather than wait until the scheduled maturity date.
5. Scheduled maturity
The original eight-year tenure means this tranche is scheduled to mature on November 2, 2029. Investors who do not redeem early can continue holding the bonds until that date, subject to the scheme’s terms.
The important point is that the headline return does not automatically make early redemption the right choice for every investor.
The Bigger Picture
The SGB 2021-22 Series VII redemption highlights the substantial returns investors have received from gold during the five-year holding period. The price has increased from ₹4,715 for discounted online subscribers to ₹14,167, producing approximately 200% capital appreciation before interest and taxes.
However, the revised tax framework changes the way investors should evaluate these returns. The earlier tax-free redemption benefit is now restricted to original subscribers who hold their bonds continuously until scheduled maturity. Premature redemption and secondary-market purchases no longer receive the same exemption.
The development also illustrates the distinction between gold-price appreciation and investment returns after tax. Investors need to consider interest payments, capital gains taxation and their own liquidity requirements before deciding whether to redeem.
Looking Ahead
The November 2, 2026 redemption date will allow eligible Series VII investors to realise their gains after completing the five-year lock-in period. The ₹14,167 redemption price provides a clear benchmark, but the final amount received will depend on the units held and applicable tax treatment. Investors should also check the redemption process and submission deadline with the bank, post office or intermediary through which they hold the bonds.
The broader SGB market will continue to be influenced by gold prices, interest income and changes in tax policy. For investors holding other SGB tranches, future redemption announcements will provide opportunities to assess their investments using the same three-business-day gold-price formula. The new tax rules, however, make it increasingly important to distinguish between premature redemption, secondary-market transactions and scheduled maturity.
Frequently Asked Questions
1. What is the SGB 2021-22 Series VII redemption price?
The RBI has fixed the premature redemption price at ₹14,167 per gram for SGB 2021-22 Series VII, with redemption due on November 2, 2026.
2. What was the original issue price of SGB 2021-22 Series VII?
The original issue price was ₹4,765 per gram. Investors who applied online and paid digitally received a ₹50 discount, reducing their effective purchase price to ₹4,715 per gram.
3. How much return will online SGB investors earn?
Investors who purchased at ₹4,715 per gram and redeem at ₹14,167 will receive a capital gain of ₹9,452 per gram, representing approximately 200.47% appreciation, excluding interest and taxes.
4. How much interest do Sovereign Gold Bonds pay?
SGBs carry a fixed interest rate of 2.5% per year on the nominal investment amount. Interest is paid twice a year and is taxable according to the investor’s income-tax slab.
5. When can SGB 2021-22 Series VII investors redeem their bonds?
Eligible investors can opt for premature redemption from November 2, 2026, after completing five years from the original issue date.
6. Is premature SGB redemption tax-free in 2026?
No. Under the revised rules effective April 1, 2026, the capital gains exemption applies only to individuals who subscribed at the original issue and held the bonds continuously until scheduled maturity. Premature redemption is taxable.
7. What is the scheduled maturity date of SGB 2021-22 Series VII?
The bonds were issued on November 2, 2021, with an original tenure of eight years. Their scheduled maturity date is November 2, 2029.
8. How is the SGB redemption price calculated?
The RBI calculates the redemption price using the simple average of the closing prices of 999-purity gold over the previous three business days, as published by the India Bullion and Jewellers Association.
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