SGB 2020-21 Series XI: Redemption & Tax Impact
By Market Desk
Sovereign Gold Bond 2020-21 Series XI investors can redeem on Aug 7, 2026, at ₹14,564/unit. Understand the new tax implications on your capital gains.
If you’re an investor in the Sovereign Gold Bond (SGB) 2020-21 Series XI, you have the option for premature redemption on August 7, 2026. The Reserve Bank of India (RBI) has set the premature redemption price at ₹14,564 per unit.
This redemption price is based on the simple average of the closing price for 999 purity gold. The India Bullion and Jewellers Association (IBJA) published these prices for August 4, 5, and 6, 2026, leading up to the redemption date.
Key Numbers for SGB 2020-21 Series XI
- Premature Redemption Price: ₹14,564 per unit
- Original Issue Price: ₹4,912 per gram (February 9, 2021)
- Discounted Issue Price (online): ₹4,862 per gram
- Capital Gain (regular issue): ₹9,652 per gram
- Capital Gain (discounted issue): ₹9,702 per gram
- Annual Interest: 2.5% on initial investment
You might remember that these bonds were initially issued on February 9, 2021. The original price was ₹4,912 per gram, but if you subscribed online and paid digitally, you received a ₹50 per gram discount, making your issue price ₹4,862 per gram. While SGBs have an eight-year tenure, you can opt for premature redemption after five years from the issue date.
Calculating Your Potential Profits
For those who bought at the regular price of ₹4,912 per gram, the ₹14,564 redemption price means a capital gain of ₹9,652 per gram. This represents an impressive approximate 197% return over the original issue price. If you subscribed online at the discounted ₹4,862 per gram, your gain will be ₹9,702 per gram, plus any interest earned.
Don’t forget, SGB investors also receive an annual interest of 2.5% on their initial investment, paid out semi-annually.
Important Tax Changes You Need to Know
It’s crucial to understand the changes in SGB tax treatment following Budget 2026, effective from April 1, 2026. Previously, capital gains from both maturity and eligible premature redemption were tax-exempt. Now, this exemption applies only if you subscribed during the initial issuance and hold the bond until its full maturity.
This means if you choose premature redemption for your 2020-21 Series XI SGBs, you will no longer qualify for the capital gains tax exemption under these new rules. The exemption also doesn’t apply to SGBs purchased from the secondary market, so you should factor in these income tax rules when calculating your post-tax returns for August 2026.