Overview
- From April 1, 2026, redemption gains are tax‑exempt only for individuals who subscribed at the original RBI issue and held the bonds continuously to maturity, with the rule applying uniformly across all tranches.
- SGBs bought on exchanges or transferred later will no longer qualify for tax‑free redemption, and gains on such holdings will be taxed under capital gains provisions.
- The 2.5% annual interest paid on SGBs remains taxable as income, with no change to this treatment.
- Market participants expect lower premiums and reduced trading in the secondary market, and reports noted intraday declines in listed SGB prices after the announcement.
- Analysts and commentators cite a potential, modest lift to government revenues from taxing secondary‑market gains, with one estimate near Rs 5,000 crore.