Notwithstanding the recent correction in gold prices, investors in Sovereign Gold Bonds (SGBs) are still sitting on gains of 34-44 per cent over the past year.
The SGB maturing in February 2032 closed flat on Monday at ₹14,537 per gram, though it was up 34 per cent over the last year. The gold bond maturing in August 2028 gained one per cent, or ₹101, to close at ₹14,093 on Monday.
Interestingly, despite the recent fall in gold prices, the government’s outstanding obligation on SGBs remains substantial at about ₹1.12-1.20 lakh crore.
When the RBI started issuing SGBs in late 2015, gold prices were about ₹25,000 per 10 grams. Since then, they have surged to about ₹1.29 lakh.
In a bid to reduce the attractiveness of SGBs and contain its liabilities, the government, in Budget 2026, allowed capital gains tax exemption only to initial SGB subscribers who hold the bonds till their eight-year maturity period. Investors who purchase SGBs in the secondary market will no longer enjoy capital gains tax exemption.
