SGB 2020-21 Series-IV redemption at Rs 14,307: Returns, tax rules and ITR filing explained

The Reserve Bank of India (RBI) has announced the premature redemption price of Rs 14,307 per gram for Sovereign Gold Bond (SGB) 2020-21 Series-IV, allowing eligible investors to exit the bond after completing the mandatory five-year holding period. While the redemption offers substantial gains over the issue price, investors should also understand the applicable tax rules and how to report the income while filing their Income Tax Return (ITR).

Redemption price

According to the RBI, investors in SGB 2020-21 Series-IV can opt for premature redemption from July 14, 2026. The redemption price has been fixed at Rs 14,307 per unit, based on the simple average of the closing prices of 999 purity gold for the previous three business days, using rates published by the India Bullion and Jewellers Association (IBJA).

Under RBI guidelines, Sovereign Gold Bonds have an eight-year maturity, but investors are permitted to redeem them prematurely after five years from the date of issue, provided the redemption falls on an interest payment date.

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How much have investors earned?

SGB 2020-21 Series-IV was issued at Rs 4,802 per gram for investors who subscribed online after receiving the Rs 50 per gram digital discount. Investors applying through offline modes paid Rs 4,852 per gram.

With the redemption price now at Rs 14,307 per gram, online subscribers have earned an absolute gain of Rs 9,505 per gram, translating into an absolute return of nearly 198%. This gain is exclusive of the 2.5% annual interest paid on the initial investment throughout the bond's tenure.

In practical terms, an investment of Rs 1 lakh made in this SGB series at the issue price would now be worth approximately Rs 2.98 lakh (around Rs 2,97,900) at the current redemption price, apart from the interest received over the years.

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SGB calendar for 2026

SGB Tranche	Issue Date	Premature Redemption Date	Redemption Request Window
2018-19 Series IV	1-Jan-19	1-Jul-26	May 30, 2026 to June 22, 2026

2020-21 Series IX

5-Jan-21

4-Jul-26

June 4, 2026 to June 24, 2026

2020-21 Series IV

14-Jul-20

14-Jul-26

June 12, 2026 to July 4, 2026

2019-20 Series II

16-Jul-19

16-Jul-26

June 15, 2026 to July 6, 2026

2020-21 Series X

19-Jan-21

18-Jul-26

June 18, 2026 to July 8, 2026

2021-22 Series IV

20-Jul-21

20-Jul-26

June 19, 2026 to July 10, 2026

2019-20 Series VIII

21-Jan-20

21-Jul-26

June 20, 2026 to July 13, 2026

2018-19 Series V

22-Jan-19

22-Jul-26

June 20, 2026 to July 13, 2026

Tax rules investors should know

Tax treatment depends on how and when the bonds are redeemed.

For Assessment Year (AY) 2026-27, taxpayers must continue to follow the existing provisions, as the changes announced in Budget 2026 will take effect only from AY 2027-28.

Under the revised framework announced in the Budget, the capital gains tax exemption at maturity will be available only to original subscribers who purchased the bonds directly during the RBI issue and held them until the full eight-year maturity. Investors who opt for premature redemption after five years, or those who bought SGBs from the secondary market, will not qualify for the exemption under the new rules.

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How to report SGB income in ITR

The 2.5% annual interest earned on Sovereign Gold Bonds is fully taxable and must be reported under Schedule OS (Income from Other Sources) while filing the ITR. The interest is taxed according to the investor's applicable income tax slab.

Since SGBs are government securities, no Tax Deducted at Source (TDS) is deducted on this interest under Section 193 of the Income Tax Act.

Capital gains should be reported under the applicable schedules depending on the nature of redemption and the tax rules relevant to the assessment year. Reporting SGB interest and capital gains correctly will help taxpayers remain compliant and avoid unnecessary notices from the Income Tax Department.

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