Sovereign Gold Bond - Taxation on SGB

Originally published at: Sovereign Gold Bond - Taxation on SGB | Learn by Quicko

INDEXWhat is SGB – Sovereign Gold Bond?Income Head for Sovereign Gold BondCapital Gains on Sale of SGBIFOS Income from SGBIncome Tax on Sovereign Gold BondTax Treatment on InterestTax Treatment on Sale or RedemptionIndividual InvestorOther InvestorsApplicable ITR Form in case of SGBFAQs What is SGB – Sovereign Gold Bond? SGB i.e. Sovereign Gold Bond are bonds…


So i have bought SGB from the secondary market, but i intend to hold it till maturity. So int will be taxed under other sources, but am I also liable for capital gains?

Hey @Kunal_Sharma,

If the Sovereign gold bonds are held till maturity, the redemption is exempt from capital gains only for individuals.
And the interest earned will be taxable under the head Income from other sources.

Capital Gains comes into the picture only if you sell it in the secondary market.


Are there any deductions I can claim for investing in Sovereign Gold Bonds?

Hi @Joe_Fernandes,

Sovereign Gold Bonds are not eligible for deductions under Chapter VIA. However, if held till maturity they are exempt from capital gains for individual investors.

Why is Gov. (via RBI) issuing SGBs apart from the regular bonds?

(I understand this isn’t tax related, but I’ll be glad if you guys can answer this. :slightly_smiling_face:)

Hey @Augustine_Charly ,

Normally, the SGBs are issued by RBI and guaranteed by government. This is the only form of gold that pays interest. Issuing SGBs not only bring down the demand of physical gold but also track import-export activities. There may be transparent and fair pricing of gold as it is now regulated by RBI.

Unlike physical gold, SGBs are free from theft, risk and holding charges as it is fully backed by Indian government. Black money also plays important role to issue gold bond.

Here you can read the below article for more understanding about SGBs:

I hope, it helps! :slightly_smiling_face: