Sovereign Gold Bond premature redemption in October 2026: Check the dates

New business data points to the fact that Market participants holding certain Sovereign Gold Bond (SGB) tranches will get an opportunity to exit their investments prematurely in October 2026. The Reserve Bank of India (RBI) has specified redemption dates for eligible SGBs, along with the period during which market participants need to submit their redemption requests.

For October 2026, four SGB tranches are scheduled for premature redemption. Market participants holding the 2019-20 Series V, issued on October 15, 2019, can seek premature redemption on October 15, 2026. The request window for this tranche is from September 14 to October 5, 2026.

The 2019-20 Series VI, issued on October 30, 2019, will be eligible for premature redemption on October 30, 2026. Market participants need to submit their requests between September 29 and October 21, 2026.

The 2020-21 Series I, issued on April 28, 2020, is scheduled for premature redemption on October 28, 2026. The request window for this tranche is from September 26 to October 19, 2026.

The fourth tranche, 2020-21 Series VII, was issued on October 20, 2020. Its premature redemption date is October 19, 2026, with market participants required to submit their requests between September 19 and October 9, 2026.

The RBI's redemption calendar covers several SGB tranches that become eligible for premature redemption between October 2026 and March 2027. Market participants should as a result check the offering date and series of their SGB before making a redemption request.

When can SGBs be redeemed before maturity?

Sovereign Gold Bonds have an eight-year maturity period. That stated, market participants are allowed to make a premature redemption request after completing five years from the date of offering. Such redemption is available only on specified interest payment dates.

The redemption amount is linked to the prevailing price of gold. For premature redemption, the price is calculated using the simple average of the closing price of 999-purity gold for the three business days preceding the redemption date. The gold prices published by the India Bullion and Jewellers Association (IBJA) are used for this calculation.

Apart from any change in the value of gold, SGB market participants receive a set interest of 2.5 percent per annum on the initial investment amount. The interest is paid half-yearly until redemption or maturity.

Tax rules for SGBs have been revised from April 1. The capital upside tax exemption on redemption at maturity will now be available only to market participants who subscribed during the primary issuance and hold the bonds until maturity.

Even if you subscribed during the primary issuance, premature redemption will now be taxed.

Those who bought SGBs from the secondary market will no longer qualify for tax-free redemption, even if they hold the bonds till maturity.

Market participants planning to exit an SGB in October should as a result check their bond's series, offering date, applicable redemption date, request deadline and tax implications.