Sovereign Gold Bond Tax Exemption Changes: Budget Shocks Secondary Market Investors

• Union Finance Minister Nirmala Sitharaman announced changes to Sovereign Gold Bond (SGB) tax exemption rules in the Budget.
• Capital gains tax exemption on SGBs will no longer be universally available, specifically impacting those who buy from the secondary market.
• Investors who purchased SGBs at the time of issue and held them until maturity will still receive tax-free returns.
• Profits from SGBs bought on stock exchanges (secondary market) and held to maturity will be taxable from April 1, 2026 (FY 2027).
• SGBs offer 2.5% annual interest, an 8-year maturity, and have historically provided excellent returns, with the first tranche yielding 10.87% CAGR.

Why It Matters: New Budget rules will tax capital gains on Sovereign Gold Bonds bought from the secondary market.