SGB Tax Shock: Sell Now or Hold Till April 1, 2026? New Rules Create Dilemma

• Investors in Sovereign Gold Bonds (SGBs) face a dilemma due to proposed tax rule changes in Budget 2026, especially concerning premature redemption.
• The 5-year lock-in period has completed for SGB Series IX, X, and XI of 2020-21, allowing premature redemption.
• SGBs bought directly from RBI and redeemed with RBI remain tax-exempt, even after 5 years or at 8-year maturity.
• The new rule, effective April 1, 2026, will end tax exemption on premature redemption for SGBs bought from the secondary market.
• Tax experts advise that SGBs bought from the secondary market might incur lower tax if redeemed before April 1, 2026.