What an SGB is
Sovereign Gold Bonds are Government of India securities issued by the Reserve Bank of India and denominated in grams of gold. At maturity the holder receives the rupee value of that gold, plus interest of 2.5% a year on the issue price paid during the life of the bond.
Status in 2026: no new issues
The last tranche was SGB 2023-24 Series IV in February 2024. After the 2025 Budget, the Finance Ministry indicated that it would not continue issuing the bonds, because they had become high-cost borrowing for the government. Bonds already issued are unaffected.
Anyone who wants an SGB now can only buy an existing series from another holder on NSE or BSE, through a demat account. Prices there can be above or below the value of the gold, and trading in some series is thin.
Early redemption with the RBI
From the fifth year after issue, holders can ask to redeem early on the dates when interest is due. The RBI announces the redemption price before each date: the simple average of the closing price of 999 gold published by the India Bullion and Jewellers Association for the three business days before. For example, the RBI set ₹14,614 per unit for SGB 2020-21 Series VII (October 2026) and ₹14,725 per unit for SGB 2019-20 Series V (October 2026).
Requests go through the bank, post office, broker or agent where the bond is held, within the window the RBI announces.
How SGBs are taxed from 1 April 2026
| Event | Tax treatment |
|---|---|
| Interest of 2.5% a year | Added to income and taxed at your slab rate; no TDS |
| Held from original issue to maturity | Capital gain on redemption exempt |
| Bought on the stock exchange and held to maturity | Not exempt from 1 April 2026; taxed as a capital gain |
| Early redemption with the RBI | Not covered by the maturity exemption from 1 April 2026; taxed as a capital gain |
| Sold on NSE or BSE | Long-term after 12 months at 12.5%; otherwise at your slab rate |
Points for existing holders
- Check that the bank account linked to the bond is current, so that interest and redemption money arrive.
- Note the maturity date and the early redemption windows of each series you hold; the RBI publishes them in its press releases.
- If you bought on the exchange, the maturity exemption no longer applies to you; keep the purchase contract note for the capital gains calculation.
Frequently asked questions
- Can I buy a new Sovereign Gold Bond in 2026?
- No. No tranche has been issued since February 2024, and none is announced. Only existing series trade on NSE and BSE.
- How is the early redemption price set?
- As the simple average of the IBJA closing price of 999 gold for the three business days before the redemption date. The RBI publishes it in a press release.
- Is the gain on an SGB still tax-free?
- Only if an individual bought it at original issue and held it until maturity. Bonds bought on the exchange, and early redemptions, are taxed as capital gains from 1 April 2026.
- Is GST charged on SGBs?
- No GST applies to Sovereign Gold Bonds.
- Is this page investment advice?
- No. It explains how prices, purity and taxes work, with sources. It does not recommend buying, selling or holding any product. See our Financial Disclaimer.
Sources
- RBI: Sovereign Gold Bond FAQs
- RBI: premature redemption price, SGB 2020-21 Series VII (16 October 2026)
- RBI: premature redemption price, SGB 2019-20 Series V (14 October 2026)
- Outlook Business: Finance Ministry on ending new SGB issues
- NISM: how Budget 2026 changes SGB taxation
- Income Tax Department
This guide explains rules and prices for general information. It is not investment, tax or legal advice. Duty and tax rules change; check the official source before you act. See our Financial Disclaimer and Corrections Policy.