SGBs plunge 10% on NSE after Budget 2026 ends capital gains tax exemption from April 1

Sovereign Gold Bonds (SGB) prices across maturities fell sharply on the NSE on Monday, continuing their freefall for the second day following the government's decision to remove capital gains tax exemption on SGBs purchased in the secondary markets.

Finance Minister Nirmala Sitharaman announced the move in her Budget 2026 speech, made on Sunday. She said 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. "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.


The Sovereign Gold Bonds 2.50% April 2028 SR-I 2020-21 fell by Rs 1,602.16 or 10% to Rs 14,419.46 per gram, while 2.50% Gold Bonds 2027 SR-III was also down 10%. Likewise, Sovereign Gold Bonds 2.50% August 2028 SR-V 2020-21 was lower by the same amount.

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.

CA Divya Bhanushali, CPO of TaxBuddy.com, said that this change is quite straightforward for the average retail investor and is taken with a view to differentiating SGBs from trading instruments. "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 is meant 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 jewellery 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.

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