Quick Summary
The Government has proposed a significant clarification in the tax treatment of Sovereign Gold Bonds (SGBs) by amending section 70(1)(x) of the Income-tax Act . The amendment aims to ensure uniform application of the capital gains tax exemption across all issuances of Sovereign Gold Bonds by the Reserve Bank of India (RBI). Under the existing provision, income arising from the redemption of Sovereign Gold Bonds is exempt from capital gains tax. However, since SGBs are issued in multiple serie
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FAQ :
From the tax year 2026-27, the capital gains tax exemption on SGBs will only be available to those who subscribe to the bonds at their original issue and hold them until they mature.
Investors who purchase Sovereign Gold Bonds from the secondary market will no longer be eligible for the capital gains tax exemption upon redemption.
The amendment will take effect from April 1, 2026, and will apply to the tax year 2026-27 and subsequent tax years.
The amendment aims to ensure the capital gains tax exemption is applied uniformly across all SGB issuances and aligns the provision with its original policy intent of encouraging long-term investment.
If you subscribed to the SGBs at the original issue and hold them until maturity, you will still be eligible for the capital gains tax exemption.
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