Budget 2026 Revises Tax Exemptions on Sovereign Gold Bond Redemptions

The Union Budget 2026 introduces significant changes to the taxation of Sovereign Gold Bonds (SGBs), effective April 1, 2026. Capital gains tax exemption on SGB redemption will now apply only to investors who purchased bonds directly from the government at issuance and held them until maturity. Investors who bought SGBs on the secondary market will face capital gains tax upon redemption, even if held to maturity. Additionally, the tax exemption on premature redemption after the five-year lock-in period has been removed for all investors. A limited window in early 2026 offers some investors a final chance for tax-free redemption under previous rules.