2 min readNew DelhiUpdated: Feb 2, 2026 05:59 AM IST
The Union Budget for 2026-27 has proposed a tweak in the capital gains tax rule for the Sovereign Gold Bonds (SGBs) previously issued by the government, saying that they will be exempted from this tax only if they are “subscribed to by an individual at the time of original issue and are held continuously by such individual until redemption upon maturity”.
As such, the proposed rule change means that any gold bonds purchased in the secondary market will not be exempt from capital gains tax even if the new buyer holds them until they mature. These bonds have a tenure of eight years.
The proposed amendment will come into effect from April 1.
Sovereign Gold Bonds were first issued in late 2015 in the hope that they would help reduce the demand by Indians for physical gold, which needs to be imported and is a major contributor to India’s trade deficit. According to Commerce ministry data, India imported nearly $50 billion of gold in the first nine months of 2025-26.
However, these bonds — which provide a rate of interest of 2.5% in addition to the price appreciation linked to gold — were discontinued two years ago as the cost to the government kept increasing due to rising gold prices.
© The Indian Express Pvt Ltd
.