Last Updated on February 1, 2026 at 5:57 pm
Budget 2026 has clarified the tax treatment of sovereign gold bonds. They are tax-free only for original subscribers who purchase from banks or the RBI, not from the secondary market and hold them to maturity (8 years).
Those who purchase SGBs in the secondary market must pay capital gains tax. This shall take effect from “1st day of April, 2026, and shall apply in relation to the tax year 2026-27 and subsequent tax years”. That is from FY 2026-2027 (AY 2027-2028).
This tax applies to SGBs held in demat form (which can be sold immediately) and in non-demat form (which can be sold to the RBI only after five years).
Tax rate: As per tax slabs, if sold within 12 months, and at 12.5% without indexation if sold later.
Those who buy SBGs mid-term and hold them to maturity will also be subject to the above tax.
In summary, who gets taxed?
- Anyone who purchases SGBs in the secondary market.
- Anyone who buys mid-term and holds to maturity (since they are not original subscribers).
- Original subscribers who exit before the full 8-year tenure.
Note: Only SBGs sold before FY 2026-2027 are exempt from tax. For example, if I had purchased in the secondary market before FY 2026-2027 and held to maturity (which is in FY 2026-2027 or later), I would have to pay tax.