At present, Section 70(1)(x) of the Income-tax Act provides exemption from capital gains tax on income arising from redemption of SGBs under the Sovereign Gold Bond Scheme, 2015. These bonds have been issued by the RBI in multiple tranches over the years, with each series treated as a separate issuance.
To ensure uniform application of the exemption across all issuances and to align the provision with its original intent, the government has proposed to amend Section 70(1)(x). Under the revised provision, the capital gains exemption will be available only if the bond was subscribed to at the time of its original issue and held continuously until redemption on maturity.
This means that investors who purchase SGBs in the secondary market may no longer be eligible for the capital gains tax exemption on redemption, as the benefit will be restricted to original subscribers who hold the bonds till maturity.
The amendment is proposed to take effect from April 1, 2026, and will apply to assessment year 2026–27 and subsequent tax years.
The move is aimed at standardising the tax treatment of SGBs across all series and clarifying the scope of the exemption under the law.
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