Union Budget 2026: SGBs to be bought in secondary markets from April 1 to collect capital gains tax

In a significant move, the government today proposed to remove the capital gains tax exemption on sovereign gold bonds (SGBs) purchased in the secondary markets. Finance Minister Nirmala Sitharaman announced in Budget 2026 that the exemption will be given only to individual investors who purchased it from the Reserve Bank of India (RBI) and held it till maturity.“It is proposed to provide that the exemption from capital gains tax in respect of government gold bonds shall be available only where such bonds are subscribed by an individual at the time of original issuance and are held continuously till redemption at maturity,” FM Sitharaman said in her address today. “It is also proposed to provide that this exemption shall be uniformly applicable to all issues of sovereign gold bonds by the Reserve Bank of India,” she added.

Commenting on the development, CA Divya Bhanushali, CPO of TaxBuddy.com, said that this change is quite easy for the average retail investor. “If you buy government gold bonds directly from the RBI when they are issued and just hold them until they mature in eight years, you will pay zero tax on your gains – that is the benefit being protected here,” she said.
According to her, the move serves to differentiate SGBs from trading instruments as the government wants to reward committed investors, not speculators. “SGBs are meant to be a safe, hassle-free alternative to buying physical gold jewelery or coins for your family’s future. By ensuring that only patient, buy-and-hold investors get the tax exemption, the policy reinforces that SGBs are about wealth creation through disciplined saving, and not through quick profits. The uniformity across all RBI issuances also means that every investor gets the same fair treatment no matter when they invest,” she added.

The provisions of section 70(1)(x) of the Act provide for exemption from capital gains tax on income arising from redemption of SGBs issued by the RBI under the scheme launched in 2015. The SGBs were issued on a recurring basis through multiple series notified from time to time, each of which constituted a separate issue.

These changes will come into effect from April 1, 2026 and will apply to the 2026-27 tax year and subsequent tax years.

SGB ​​prices across maturities fell sharply on the NSE after the announcement. Government Gold Bonds 2.50% April 2028 SR-I 2020-21 fell 9% and last traded at Rs 15,960, while Government Gold Bonds 2.50% August 2028 SR-V 2020-21 also closed 9% lower.This is FM Sitharaman’s ninth consecutive Union Budget

This is only the second time in the history of Independent India that the stock markets will be open for trading. The last time they were open on Sundays was February 28, 1999 under the Atal Bihari Vajpayee government.

Also read: Budget 2026: PSU bank shares fall up to 6%; Bank of India, BoB incurring losses

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