New Delhi, Feb. 1 -- The Union budget for FY27 proposes to withdraw the capital gains tax exemption on sovereign gold bonds (SGBs) for investors who buy them from the secondary market, limiting the benefit only to the original subscribers. The move changes the post-tax returns for a large pool of investors, especially since the government has not been making fresh issuances of these bonds and most trading now happens in the secondary market.

The change effectively ends the tax-free status for secondary buyers or those who purchase these bonds from the stock exchange or from other investors after the initial allotment.

Starting 1 April 2026, the capital gains exemption at the time of redemption will be available only to investors who hav...