New Sovereign Gold Bond rule proposed: Capital Gains tax exemption only on original issue held till maturity

Union Budget 2026 has proposed to revise the Sovereign Gold Bond (SGB) taxation rules for investors who are not subscribed to the original issue. According to the proposal, capital gains tax exemption will only be available to taxpayers who subscribed to the SGB at the time of original issue and held continuously until maturity till redemption.

The "Annexure B" of the Budget Speech 2026 document says the following about SGB taxation:

The Budget proposal is likely to impact taxpayers who invested in SGBs through the secondary market.

“In her Union Budget 2026‑27 address, Finance Minister Nirmala Sitharaman proposed a key change to the tax treatment of Sovereign Gold Bonds. She stated that the capital gains exemption will now be available only to individuals who subscribe to the bonds at the time of the original issue and hold them continuously until maturity. The Budget also specified that this exemption will apply uniformly across all issuances of Sovereign Gold Bonds by the Reserve Bank of India, ensuring a consistent and standardised tax benefit for eligible investors,” says Rajarshi Dasgupta, Executive Director, Tax, AQUILAW comments.