"Tick two boxes or pay tax": FM Sitharaman clarifies new Sovereign Gold Bond rules for secondary market buyers

The total value of gold held by RBI stood at Rs 360,884 crore as on December 26.

• SGBs are tax-exempt only if bought at issue and held till maturity
• SGB secondary market sales now taxed at 12.5% as long-term capital gains.
• Gold prices surged due to global uncertainties and rising central bank purchases

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The intent of introducing Sovereign Gold Bonds (SGBs) was to make the investor pick it up at the time of issuance and hold it till maturity, Finance Minister Nirmala Sitharaman told Network18 Editor-in-Chief Rahul Joshi on Monday. "If one of these two boxes are not ticked, you will be taxed," Sitharaman said.

"There are these two boxes to ticked," Sitharaman said. Of four situations, the tax will be "levied in three", she added. She was responding to a query on the imposition of tax on the sale of SGBs in secondary markets – which markets are calling "retrospective".

Finance Minister Nirmala Sitharaman said during her Budget 2026 speech that "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."

"It is also proposed to provide that this exemption applies uniformly to all issuances of Sovereign Gold Bonds by the Reserve Bank of India," the FM had said in her speech.

Since now secondary market sale of SGBs will be taxed, a levy of 12.5 percent will be applicable on the sale – as Long-Term Capital Gains.

The capital gains arising from redemption of SGBs issued by the Reserve Bank of India are exempt under the provisions of section 70(1) of the Income-tax Act, 2025.

On the surge in gold stocks, Sitharaman said that many "central banks around the world, not only the RBI, are pitching to buy more gold. And India seems to be following the trend."

As per RBI data, the total value of gold held by RBI stood at Rs 360,884 crore as on December 26, 2025. In December 2024, the value of the gold being held by RBI was at Rs 200,458 crore.

"Uncertainties in the world are making people fall back on time-proven asset, which is gold. It’s beyond anyone’s fair assessment to see where things will move, and therefore, the demand for gold."

According to the Economic Survey, gold prices jumped from $2,607 to $4,315 per ounce in 2025. As of January 26, 2026, the price of gold per ounce was $5101.34. This surge was attributed to a weakening US dollar, ongoing expectations of of negative real rates, and the market’s increasing concern about geopolitical and financial tail risks.