Prepared by Finin2min Editorial Desk · Rates and rules verified 5 October 2026
Which gold route leaves you with more after tax? Compare an SGB bought at issue, an SGB bought on the exchange and digital gold — with the 2.5% SGB interest, the 3% GST and spread on digital gold, and the Finance Act 2026 change that makes the SGB capital-gains exemption available only to original subscribers who hold to maturity.
Until Tax Year 2025-26 an individual who redeemed a Sovereign Gold Bond through the RBI at maturity or in the premature-redemption window was exempt from capital-gains tax on the redemption. The Finance Act 2026 narrowed the exemption (section 70(1)(x) of the Income-tax Act, 2025): from Tax Year 2026-27 it applies only where the bond was subscribed at the time of original issue and held continuously until redemption on maturity. Gains are therefore taxable if you bought on the stock exchange, redeem prematurely, or sell on the exchange. The calculator applies the rule that matches the tax year you select and does not apply the new rule to earlier years.
| Route | Entry cost | Income while held | Exit and tax |
|---|---|---|---|
| SGB bought at issue | Issue price (no GST) | 2.5% a year on issue price, taxable | Maturity at 8 years: exempt (2026 rule). Premature (5-7 years): LTCG 12.5%. Exchange sale: LTCG 12.5% after 12 months |
| SGB bought on exchange | Market price (premium or discount), no GST | 2.5% on issue price of the units, taxable | Always taxable under the 2026 rule: LTCG 12.5% after 12 months, slab before |
| Digital gold | Gold price + markup + 3% GST | None | Sell at buyback spread; LTCG 12.5% after 24 months, slab before |
Digital gold is not regulated by SEBI or the RBI as a security and carries platform and counterparty risk; SEBI has cautioned investors about it. SGBs are Government of India securities; their exchange price can differ from the gold price.
₹1,00,000 held 8 years with gold at 8% a year, 30% slab, 2% digital markup and spread, 3% GST: SGB bought at issue leaves ₹2,13,091 (capital gain exempt, interest taxed); SGB bought on the exchange at gold price leaves ₹1,86,808 (gain taxed at 12.5%); digital gold leaves ₹1,60,233. If the same SGB were redeemed prematurely after 6 years the exemption would be lost.
Only if you are an individual who subscribed at the original issue and hold the bond to maturity (8 years), for redemption in Tax Year 2026-27 or later. Premature redemption and exchange purchases are taxable.
Yes. The 2.5% annual interest is taxable at your slab rate in every case.
GST of 3% is charged when you buy. Gains are long-term after 24 months (12.5%, no indexation) and otherwise taxed at your slab rate.
SGBs are issued by the Government of India. Digital gold is a platform product held by a private seller and is not regulated like a security.
Yes. Choose FY 2025-26 or earlier and the older exemption (individual redeeming through RBI at maturity or in the premature window) is applied. The new rule is not applied retrospectively.
Rates and rules shown here were checked against the sources above on 5 October 2026. Government notifications can change a rate or rule at short notice; always confirm on the official site before you invest, file or claim.
Educational estimate only. Tax, legal, financial or regulatory treatment depends on facts and the law applicable to the relevant period. Verify the current official source or obtain professional advice before acting.
Scope: After-tax value of an SGB bought at issue, an SGB bought on the exchange and digital gold, for the tax year you select.
The calculation engine was checked against an independently written reference implementation across 960 SGB and digital-gold input combinations, and against published figures where the scheme publishes them. Review date: 5 October 2026.
Prepared by Finin2min Editorial Desk. Educational estimate only.
Background, worked examples and the rules behind these numbers.