Union Budget 2026: SGBs bought from secondary markets to attract capital gains tax, effective April 1

In a significant move, the government today proposed removing 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 relief will be given only to those individual investors who have bought it from the Reserve Bank of India (RBI) and hold it till maturity.

“It is proposed to provide that the exemption from capital gains tax in respect of Sovereign Gold Bonds shall be available only where such bonds are subscribed to by an individual at the time of original issue and are held continuously until redemption on maturity,” FM Sitharaman said in her speech today. “It is also proposed to provide that this exemption applies uniformly to all issuances 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 straightforward for the average retail investor. “If you buy Sovereign Gold Bonds directly from the RBI when they’re issued and simply hold them until they mature in eight years, you pay zero tax on your gains – that’s the benefit being protected here,” she said.
According to her, this move comes 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 jewelry or coins for your family’s future. By ensuring only patient, buy-and-hold investors get the tax exemption, the policy reinforces that SGBs are about wealth creation through disciplined savings, not quick profits. The uniformity across all RBI issuances also means every investor gets the same fair treatment, regardless of when they invest,” she added.
The provisions of section 70(1)(x) of the Act provide an exemption from capital gains tax on income arising from the redemption of SGBs issued by the RBI under the scheme that was launched in 2015. The SGBs were issued on a recurring basis through multiple series notified from time to time, each constituting a separate issuance.

These amendments will take effect from April 1, 2026, and will apply to the tax year 2026-27 and subsequent tax years.
The SGB prices across maturities fell sharply on the NSE following the announcement.Sovereign Gold Bonds 2.50% April 2028 SR-I 2020-21, plunged 9% and last traded at Rs 15,960 while Sovereign Gold Bonds 2.50% August 2028 SR-V 2020-21 also closed 9% lower.

It is FM Sitharaman’s ninth consecutive Union Budget

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

Also Read: Budget 2026: PSU bank stocks plunge up to 6%; Bank of India, BoB lead losses

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